Transport Committee on May 5th, 2022

[Kathleen Sullivan]

I'd love to just quickly say that from a food and beverage manufacturing standpoint, by far the number one issue is labour. At the end of the day, if you don't have the workers, you can't manufacture the products. If our suppliers don't have the workers, it makes it difficult to get packaging and other inputs.

Ultimately, I will just say that when you have companies that are short of workers, it also makes it very difficult for them to focus on things like the future and on growth, sustainability, and some of the other broad policy objectives the country has. It just makes everybody so focused on survival and on what's happening today.

[Churence Rogers, Liberal, Bonavista—Burin—Trinity, NL]

Okay.

Mr. Bjornson, maybe you can talk a little more about the labour disputes at the railway. I know that the CP rail dispute this past year created some problems for your organization and others.

[Tyler Bjornson]

I was going to answer your question to say that any event that resulted in any sort of disruption or stoppage to one of two of Canada's national railways is a catastrophic event, frankly, for every single sector in the country and in particular for the grain sector.

There are certain things that we have control over and certain things that we don't. We don't have control over wildfires, floods, avalanches and cold weather and things of that nature, so what we rely upon is the railways to have excess capacity available in cars, crews and locomotives to be able to catch up when these disruptions that we don't control happen. We don't see that happening in our railways. They often get way behind and it takes months and months to catch up and in some cases they simply don't.

On the labour side of things, that's actually something we can control. We feel very strongly that in such an obvious essential service—it's the absolute lifeblood of our economy—it should be essential. Quite frankly, if either railway management or the union in question believes that their positions are reasonable they should have no hesitation at all to submit themselves to binding arbitration. It's an ongoing mystery why our rail services aren't considered essential and taken care of that way from a regulatory point of view.

[Churence Rogers, Liberal, Bonavista—Burin—Trinity, NL]

In fairness to the other witnesses, I'm not sure if there's anybody else who would want to comment on that question.

[Dennis Darby]

If I could, sir, I want to underscore what my colleagues have said.

In the last available data there were over 100,000 vacancies—unfilled positions—in the manufacturing and exporting sector, which includes a lot of the people on this call. That really does impact us long term. Kathleen was right. It impacts our ability to even think about moving supply chains here, and that's what was so evident and so surprising in our survey of members. When asked, okay, you have supply chain problems, will you move production to Canada, most of them say, I can't, I can't even think about that at this point.

[Churence Rogers, Liberal, Bonavista—Burin—Trinity, NL]

Thank you.

[The Chair, Liberal, Peter Schiefke]

Mr. Barsalou-Duval now has the floor for six minutes.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Thank you, Mr. Chair.

I would like the clerk to tell me if the Canadian Ferry Association representatives are still absent. Are they absent? Very well.

My question will be for Mr. Darby from the Canadian Manufacturers and Exporters.

You talked about the whole issue of relocation, at least the possibility of doing business with suppliers closer than in the past. You talked about the possibility of doing business with Canadian or Quebec suppliers rather than suppliers that come from abroad, or even relocating plants or manufacturing units here rather than keeping them abroad.

This is a phenomenon that we've seen emerging more recently. Previously, it looked like everything was moving towards offshoring, whereas now we're seeing a reverse trend. Could you talk about this and why this issue is important to you?

Do you think it would be relevant, for example, if there were government programs or measures that promote relocation and substitution so that we are less dependent on foreign supply?

[Dennis Darby]

I did not understand your question, as it was in French.

[The Chair, Liberal, Peter Schiefke]

Mr. Darby, I think you have to choose the language of your choice for the interpretation that you would like to have in your headset, sir.

[Dennis Darby]

I did. That choice did not come up. I apologize.

Could we pass it on to someone else? I'll ask if someone could help me with how to choose that on my headset because I don't have either here.

[The Chair, Liberal, Peter Schiefke]

Sure. Are there other members and witnesses appearing today who unfortunately did not have the translation that they would have liked to have had to be able to answer the question?

Perhaps we can go to any witnesses who would like to answer that question.

[Kathleen Sullivan]

I'll take the opportunity, if I may.

From a manufacturing perspective—food and beverage in this case—I think we do need to take a look at, first of all, the need for an industrial strategy or industrial policy for Canada. I think that would be multi-faceted. It would include things like transportation and infrastructure.

I also think, to go to the point of the question you asked, that we need to think about how we attract investment in Canada and encourage Canadian companies to continue growing here while also attracting foreign companies. I do think that part of that also goes to the issue of automation and robotics and the increased adoption of technology.

Certainly, in my industry, we fall well behind other countries in terms of our adoption of technology automation. I think that is obviously an issue that is broader than just the question about supply chains, but I think it is one that ultimately goes to how we ensure we have a strong manufacturing and industrial base in the country.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Thank you.

Could I be informed when Mr. Darby will have access to the interpretation service, or will this not be possible throughout the session?

[The Chair, Liberal, Peter Schiefke]

You need to repeat the question, as there was no interpretation.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Is it working now?

[The Chair, Liberal, Peter Schiefke]

It is working now. Mr. Darby had not selected the interpretation properly.

Just to be clear, Mr. Darby, are you able to now get the translation?

That's perfect.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

All right, so I'm going to ask you the same question, the one that Ms. Sullivan was able to answer.

Why is relocation or product substitution important for your companies?

What kind of government policies could support you in this?

[Dennis Darby]

Thank you very much.

I think there are two things to say.

One is what we need to be attracting. Obviously we've talked about policies to bring more labour into Canada, and we need to increase our economic immigration. Second, we need to be increasing the incentives to have capital located here.

We need more automation in Canada. We need to become less reliant on labour alone. If we do that, we'll have a higher probability of achieving the level of competitiveness in our manufacturing—whether it's in food, automotive, machines or biotech—to where we are more competitive versus our competitor countries.

That's been a problem for Canada for decades. We've fallen behind. Our capital stock is old. We don't use the latest technology. We've substituted labour for capital, and that's been a problem.

We've advocated strongly that we need to find ways to incentivize so that we get more investment in Canada in the industrial sector and we can become more resilient.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Thank you.

I have another question, which perhaps you could answer.

We find that Canada, over time and particularly in recent years, has not been very inclined to enter into free trade agreements. When we look at the whole issue of access to government procurement, or at least the issue of local content policies, we find that many people have been concerned that some companies here would be disadvantaged in some way relative to foreign companies because of this kind of provision.

Do you think that if the local content requirements were reinstated, it might be good for the manufacturing industry here?

[Dennis Darby]

Yes, sir, of course. I agree entirely. That is something we need to do. We need to improve our local content.

Canada tends to be a very fair trader and plays very much on a level playing field. Our competitor countries don't always do that, and they do tend to favour local production. We said on the recent budget, where there was more money put aside for infrastructure, that we need to make sure we take advantage of local procurement on that infrastructure, so that Canadian companies get an equal footing at the table.

Part of the problem sometimes is that—we've talked about this—Canadian companies tend to be on average smaller than their global counterparts, so they often need that leg up to be able to compete. I think that's really important for Canada to consider. I don't think it puts us offside in any of our WTO or other agreements, and I think it's something that we ought to pursue with some vigour.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Thank you.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Barsalou‑Duval.

Next we have Mr. Bachrach.

Mr. Bachrach, the floor is yours. You have six minutes.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Thank you very much, Mr. Chair.

Thanks to all our witnesses for their testimony so far. It has been interesting.

I'd like to start with Mr. Lewis-Manning from the Chamber of Shipping.

Mr. Lewis-Manning, you spoke a bit about climate impacts, and I think I heard you say that we need to tackle the issue aggressively. There has been a fair amount of talk about tackling it in terms of reducing emissions, but we all know that there's a certain amount of change that is coming regardless, because of the emissions that we've put into the atmosphere over the past hundred and some years.

I'm curious about adaptation in your industry and what preparations companies are making to ensure they're more resilient in the face of extreme weather events. Can you speak to that?

[Robert Lewis-Manning]

The marine industry is regulated, first off, globally through the International Maritime Organization, which is an organization within the United Nations framework. The most positive sign is we see individual carriers now adopting measures that are more aggressive than those by a global regulator. This is largely driven by customers.

Customers need to improve their supply chain performance and they are looking for the marine carriers to be part of that solution. In Canada, for example, there are companies now trading that have adopted biofuels and are expanding their trial of biofuels significantly. What I would say, as an interim solution, is you will see more carriers now turning to LNG as a fuel.

All of these are steps designed to meet the demands, largely, of their clients, who are expecting them to improve their performance. There's nothing better than seeing competitors trying to out-compete each other in reducing emissions.

Is the challenge huge? Yes. Is the timeline tight? Yes. We're talking about assets that have a 20- to 30-year lifespan, and they need to make decisions today in order to adopt the technologies to meet the net and zero-emission targets for 2040 and 2050. It's a huge challenge.

That's a very brief statement about what's happening in the marketplace.