Transport Committee on Oct. 5th, 2022

[The Chair, Liberal, Peter Schiefke]

I call this meeting to order.

Welcome to meeting No. 32 of the House of Commons Standing Committee on Transport, Infrastructure and Communities.

Pursuant to Standing Order 108(2) and the motion adopted by the committee on Thursday, February 3, 2022, the committee is meeting to study anticipated labour shortages in the Canadian transportation sector.

Today’s meeting is taking place in a hybrid format, pursuant to the House Order of November 25, 2021. Members are attending in person in the room and remotely using the Zoom application.

Members of the committee, today we have appearing before us as witnesses, from the Canadian International Freight Forwarders Association, Mr. Bruce Rodgers, executive director, and Ms. Julia Kuzeljevich, director, policy and communication.

From the Canadian Trucking Alliance, we have Mr. Stephen Laskowski, president, as well as Geoffrey Wood, senior vice-president.

From Teamsters Canada, we have Mariam Abou-Dib, executive director, government affairs, as well as, in person here with the committee, Mr. Omar Burgan.

We will begin with opening remarks from the Canadian International Freight Forwarders Association, for five minutes.

The floor is yours.

[Julia Kuzeljevich, Director, Policy and Communication, Canadian International Freight Forwarders Association]

Thank you, Mr. Chairman, for inviting Bruce and me to speak on this critical issue.

Mr. Chair, ladies and gentlemen of the committee, on behalf of the Canadian International Freight Forwarders Association, or CIFFA, thank you for giving us the opportunity to appear before you.

Before we start, we'd like to compliment the committee for its diligence in chasing these issues, which are so serious and so complex. It means a lot to all of us in the industry that you're looking for any solutions that government might provide.

The Canadian International Freight Forwarders Association—also known as CIFFA—represents some 300 regular member firms, from the largest of global multinational freight forwarding firms to small and medium-sized Canadian companies. CIFFA member companies employ tens of thousands of highly skilled international trade and transportation specialists. Our members are the front line of Canada’s supply chain, managing the majority of freight shipments.

It’s important to note that we also represent drayage operators—the truckers serving the ports and container terminals where you have seen such congestion in recent years—and the freight brokers, who manage the movement of cross-border trade.

The human resource problems in the supply chain are critical and are not getting better. Many of the problems are tied up with the frustrations of the supply chain itself. People used to make their money on speed and volume. Today, that’s impossible in many areas. The system is, in effect, seized.

[Bruce Rodgers, Executive Director, Canadian International Freight Forwarders Association]

We have a short, less than two-minute video that one of our members recorded, which illustrates a small but contributing part of the problem. A copy of the video has been sent to the clerk.

In the video, you see 65 trucks lined up and waiting to get into one of the rail yards in Vaughan, Ontario. This is the equivalent length of approximately 40 football fields. These trucks are trying to return empty containers, which are required to facilitate export trade.

It is important to understand that these drivers make their money by moving containers between the rail yards, importers and exporters. As they sit idle, they are losing money. It is hard to recruit new drivers when everyone can see how hazardous a business it’s become. Rising fuel and insurance costs only add to the problem.

The CIFFA member who recorded this told us he had eight drivers in line, and not one got into the yard that day. Their drivers waited in excess of five hours, only to have the gates closed due to terminal congestion.

By the way, this congestion in Vaughan is actually connected to Canada's west coast. Transport Canada put significant pressure on the rail providers, terminal operators and the Port of Vancouver to clear the backlog and ships at anchorage. The rationale was to facilitate the export of grain. We all understand that priority, but the improved flow in Vancouver doesn't indicate that we solved the problems; we just moved them further inland, to both Toronto and Montreal.

Unfortunately, our first suggestion to address workforce shortages is to fix the terrible problems affecting the supply chain.

[Julia Kuzeljevich]

As parliamentarians, you'll make your own decisions about how interventionist the government should be. Our laissez-faire, market-driven system has worked well for decades, but the transport sector is having trouble resetting itself. The chronic uncertainties that are frustrating consumers are also squeezing workers, and the problem is not getting better.

Last month, we asked the Canada Border Services Agency to consider returning to a clearance system they used until just a few years ago. This allowed goods to be released much more quickly, at first point of arrival versus when the cargo has arrived at the destination yard. We've copied the letter to this committee's clerk for your information. We want the committee to know that we are constantly engaging with the government on measures to alleviate delays.

We have a couple of specifics on developing the workforce. We would urge the committee to engage with training institutions to discover whether there are resources they need to up their volumes.

Across the Canadian economy, businesses need to temporarily recruit foreign workers to alleviate shortages. We've engaged with Employment and Social Development Canada on the national occupation classification system, which undervalues certain critical transportation management roles, thus discouraging immigrant workers from applying to work here.

Due to frustrations with the supply chain, employees are leaving this profession and moving to less stressful positions. As a result, our freight forwarding employers are moving to offshore certain functions to aid with current and future labour shortages. Due to the cost structure that this solution enables, many of these activities will not return to Canada.

One of our members commented that offshoring activities have increased from 10% of their workforce up to 25% now.

Finally, we're supportive of strategies to recruit women into these industries, where they're still a small percentage, but we need to recognize that women drivers in the trucking industry, for example, may have somewhat different lifestyles and responsibilities from their male counterparts. They may be interested in local but not transcontinental driving. Also, in the video, there were no porta-potties along that long line, which is a problem for all drivers, and especially for women.

Thanks to the committee again for your attention to this issue, and we welcome your questions.

[The Chair, Liberal, Peter Schiefke]

Thank you very much.

Next we have the Canadian Trucking Alliance, and the floor is yours for your opening remarks.

You have five minutes.

[Stephen Laskowski, President, Canadian Trucking Alliance]

Thank you, Mr. Chair, and thank you, everyone, for the invitation.

I'm joined today off screen by Mr. Geoffrey Wood, our senior VP, policy.

Today we'd like to talk about what CTA is, issues in the supply chain, and solutions.

CTA represents about 5,000 trucking companies across Canada and employs about 250,000 Canadians directly.

One of the questions before the committee today is this: What are the implications of the driver shortage in Canada, and what are its solutions? The implications of the driver shortage are being felt by all Canadian businesses and households today.

There is an old saying in our sector: “If you got it, a truck brought it.” That saying is a reflection that over two-thirds of our trade by value and almost everything in our workplace or residence was once in a truck, and in some cases, multiple trucks. However, what that saying is really missing is the major economic contributor to our sector and to the Canadian economy: truck drivers themselves.

In 2022, we are learning as a society that if we didn't get it, it's because we're short close to 30,000 commercial truck drivers in Canada today. That's 30,000 vacancies. What that really means is that there should be 30,000 more trucks in the supply chain that aren't there because we don't have people. What does that mean? It means our export and import market and our domestic market isn't functioning properly.

In late spring 2022, CTA hired Nanos and Associates to survey a sample of our board of directors. This sample represented about 39,000 trucks, 40,000 employees, and about 2.2 million annual loads.

Without question, it was almost unanimous that the number one issue facing our industry and their business is the existing staff shortage and exits and retirements.

As the Government of Canada looks to address the supply chain crisis, we remind this committee that by addressing the truck driver shortage, you are addressing all sectors of the economy to help them emerge from the supply chain crisis and the disastrous impacts of inflation.

The solutions are as follows: Improve the trucking industry's access to immigration; improve our access to training dollars; stamp out the underground economy, which we refer to as Driver Inc.; take a phased-in approach to the 10 paid sick days; and address border concerns.

CTA's recommended approach to these issues are reasonable common-sense solutions that require no new legislation or special treatment for our sector but merely an extension of current practices, access to programs, tools and funds provided to other sectors, or, in the case of the underground economy and Driver Inc., the enforcement of laws and regulations that are currently on the books.

Some of the above issues appear to be going down a very positive road with the Government of Canada. For that, we are very grateful to the various ministries and ministers we're working with. Other critical matters remain a point of significant concern for our sector and for all those who rely on reliable, safe and labour-compliant trucking partners in a time when truck capacity is low.

CTA stands ready to work with the Government of Canada in a collaborative manner as our sector enters a very tenuous and critical time in its history.

Thank you very much.

[The Chair, Liberal, Peter Schiefke]

Thank you very much for your opening remarks.

Next we have Teamsters Canada.

You have five minutes. The floor is yours for your opening remarks.

[Omar Burgan, Director of Policy and Research, Teamsters Canada]

On behalf of the 125,000 men and women who are members of Teamsters Canada, I would like to thank the chair and members of the committee for inviting me to speak before the transportation committee on the topic of vacancies in the transportation industry.

In addition to working in the hospitality, tourism, trade show and sports entertainment sectors, the vast majority of Teamsters members work in the transportation industry, which includes road, rail and air transport. Teamsters Canada is Canada's largest logistics and transportation labour union.

Let me begin by speaking about the freight trucking industry.

Today, truck drivers are a very important link in the supply chain. The health of the sector has an impact on its clients’ capacity to do business, as well as on consumers themselves.

According to Statistics Canada, over the last 20 years, truck driving has become one of the most important occupations in Canada, representing 278,000 jobs in 2016. We estimate that 90% of goods shipped in Canada are transported by truck at some point.

Despite the economic importance of the sector, we've been seeing for some time that fewer new workers are attracted to truck driving. In conjunction with the median age of drivers rising rapidly, Statistics Canada data also shows very high levels of job vacancies, reaching over 26,000 vacancies in Q2 of 2022.

This level of vacancies was accurately predicted by the Conference Board of Canada almost 10 years ago. In their 2013 report, they recommended that policies be put in place to increase the attractiveness of truck driving, including recognizing truck driving as a skilled trade. In addition to ensuring the proper training of drivers and increasing road safety, this would provide incentives for young people to enter the industry, including by helping to remove prohibitive licensing fees.

Skilled trade recognition would also create easier pathways for entry into the industry, so prospective drivers can avoid unscrupulous fly-by-night employers who are cheating vulnerable workers, including new immigrants or temporary foreign workers, by not paying them what they are owed or engaging in a scam known as Driver Inc., which forces employees to incorporate so the company can skirt labour standards. We're glad the current government has improved the enforcement of labour laws, with penalties on Driver Inc. schemes, and hope more will be done to protect workers from these types of practices.

We must remain vigilant, however. An investigation in Quebec uncovered a criminal network selling fraudulent motor vehicle licenses to newcomers who wanted to become drivers. These fraudsters were able to take advantage of vulnerable workers as well as desperation in the industry, which is not attracting enough drivers.

Another major issue for truck drivers is the growing crisis of inadequate rest areas, especially in more northern areas of Canada. Drivers describe chronic inadequate access to truck stops, which makes rides longer and exhausting, and prevents drivers from getting access to meals. This problem is even worse for women. While there has been an increase in women drivers in recent years, they still remain vastly under-represented. Safe and welcoming rest stops, including access to showers, would make work much less exclusionary for women.

In the rail sector, members report a very high turnover within two years of initial hires. Rail companies are over 150 years old and have often failed to bring working conditions in line with the current century and the expectations of a newer generation of workers. Rail workers are still commonly expected to be at the beck and call of management 24-7, whether it be on weekends or holidays, or even when they've scheduled their annual vacation. Workers can often be called in for a 24-hour shift with only a two-hour notice. Some companies have draconian disciplinary policies, whereby they apply a 20-day suspension without pay, for which members lose 10% of their annual pay. This is in addition to other measures, such as inward-facing cameras that record workers' every conversation, that create an incredibly discouraging work atmosphere that many simply abandon.

Workers in the parcel delivery industry are also often faced with a squeeze on working conditions. In addition to the downward pull of Amazon on working standards across the industry, expected productivity is at levels never seen before. While there was a time when delivery people would expect 80 parcels a day, now the expectation is 140 parcels every day.

The entire transport industry must adapt by offering better working conditions if it wishes to attract a new generation of workers, because, as soon as a different sector offers them a better life, they will go there instead.

Lastly, I will add that when workers are members of unions, they're able to leverage their collective bargaining power to negotiate on a level playing field and improve their terms of employment. It has been shown, repeatedly, that countries with higher union density have lower levels of income inequality and better working conditions. We need good laws that make the process fair for workers to join unions.

Thank you to the committee for listening to my remarks, and thank you to the parliamentary staff and interpreters for making these meetings possible.

[The Chair, Liberal, Peter Schiefke]

Thank you, Mr. Burgan, and thanks to all witnesses for their opening remarks.

We will begin today's round of questioning with Ms. Lianne Rood.

Ms. Rood, the floor is yours. You have six minutes.

[Lianne Rood, Conservative, Lambton—Kent—Middlesex, ON]

Thank you, Mr. Chair, and thank you, witnesses, for being here today.

I am from a rural area, and I come from the agriculture sector, so I understand more than most people how vital the trucking industry is—especially for us to be fed, first and foremost. We can talk about everything else in our house, but if we don't have food, we are not in a good situation. Delivering goods, especially food to grocery store shelves for Canadian consumers, is obviously a priority.

I've heard all the witnesses today talking about shortages and breaks in the supply chain, whether it's at a rail yard or the ports. It has an effect all the way down the chain, and we've seen that throughout COVID—seeing major food spoilage, and shipping containers not arriving on time because trucks were not available to bring the food quickly enough to the distribution centres.

I am just curious, and perhaps this is a question for Mr. Rodgers. Can you comment on how this labour shortage is leading to increased costs for Canadians for their food supply? I think you said the fuel costs have gone up, and that's one of the things we've seen. What effect will increasing the carbon tax have on fuel and the already high cost of shipping goods to our store, going forwards?

[Bruce Rodgers]

You're bringing up some excellent points. I won't say that costs are just going up in fuel and insurance. They are going up in everything.

If you're bringing product in from outside of North America, the ocean line shipping costs have increased tenfold from what they were, and I'm going back to where those costs were six months ago. They have now started to come down due, basically, to a supply and demand situation. The costs now, we're hearing, are back to 2018 levels, so that's normalizing from a certain standpoint.

However, the changing patterns that have occurred through COVID, where the imports have definitely increased coming into North America, have had a significant effect on congestion. Our ports have not expanded. We have no more land to put the product on, so congestion is a part of the supply chain.

What we are experiencing now due to the backlog that was created out of Vancouver and the ships at anchorage.... In order to clear that backlog, they moved the product into central Canada, into Toronto and Montreal. The rail yards you used to have.... One had three yards in Toronto; it now has nine. One had one; it now has two. Equally, they have expanded into the Montreal area as well. Because of that, containers are being split. We don't know where the containers are. They are just added congestion to these additional yards.

Because these yards have opened up as well, the rail yards have additional expenses. The rail yards have changed their demurrage and detention charges. They are now charging, really, after 24 hours, so they have reverted from 72 hours on demurrage and detention to 24 hours. In addition to that, there is the cost of movement from the rail yard to these additional container yards that have since opened up, and we figure that the average cost for an import container now has increased about $1,500 from what it was prior to this congestion's being created.

You're talking about the cost of increases on food. There are increases on everything that is being imported into this country at this point in time, due to the congestion issues that have resulted through the supply chain.

[Lianne Rood, Conservative, Lambton—Kent—Middlesex, ON]

Thank you very much for that.

You alluded to this earlier. This crisis has been made worse by the labour shortage crisis and by high inflation and high fuel costs. Some groups I have met with and groups we have heard from have brought up that temporary foreign workers may be a solution to some of these problems. However, I know from experience in the agriculture sector that TFWs are not a permanent solution. There are also many logistical and regulatory challenges with bringing them to Canada and, obviously, ensuring their safety, as the Teamsters have alluded to.

I'm curious whether you believe TFWs are a viable option for the transportation sector. If we have time, I would like to hear just a brief answer from the Teamsters as well, please.

[Bruce Rodgers]

I will be very brief. I'm going to say yes. I think there is significant opportunity to bring foreign workers in on the driving sector.

What we're finding in Canada today is that the younger generation are not aspiring to be truck drivers, so we have to find them somewhere. I think immigration is the way to go.

I will defer to my friends at the Teamsters to offer further comment.

[Omar Burgan]

The Teamsters' position is that we should more consider immigrants who are on a path to citizenship. I think, as you mentioned, temporary foreign workers are a very temporary solution. We would prefer to see things like considering the trucking industry or trucking as a skilled trade in order for better training, and having the same standards across the country for any immigrant or temporary foreign worker who comes to work those jobs.

[Lianne Rood, Conservative, Lambton—Kent—Middlesex, ON]

Thank you for that.

Part of what we're hearing, though, is that we need to have really good public policy that is compassionate and fair towards new immigrants and that is attracting people into different skilled trades, because that's good public policy and supports new Canadians as they try to integrate into Canadian society.

Thank you so much for those answers today. I know my time is up.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Ms. Rood.

Next we have Mr. George Chahal.

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

[George Chahal, Liberal, Calgary Skyview, AB]

Thank you, Mr. Chair, and I want to thank all the witnesses for joining us today.

I just want to give a little context. I represent Calgary Skyview, which is northeast Calgary and home to many truck drivers and trucking and logistics companies, so I have had many opportunities to engage through trucking town halls and meet and greets with members of the industry, who do a tremendous job across the country.

Mr. Laskowski, I want to start with you. You talked about 30,000 trucking vacancies and shortages. What does that look like a few years from now? If you look at five years out, what do you anticipate based on the data? Is your data accurate, and do you think it's reliable that we can project out five years from now? What do the numbers look like then?

[Stephen Laskowski]

The most recent projection we have with regard to the driver shortage goes out two years, and that estimate is 50,000 people short. What that really means—I say it again—is that 50,000 trucks are needed in the supply chain. They aren't moving, and they aren't moving customers' goods, whether across the U.S.-Canada border or across Canada.

[George Chahal, Liberal, Calgary Skyview, AB]

What part of the workforce do you see retiring over the next five years?

[Stephen Laskowski]

We have the oldest workforce in Canada, with the largest percentage over the age of 55, and as we all saw with COVID in multiple sectors, people in that age group rapidly accelerated their retirement plans.

We are seeing that in our sector, so we are short today. We expect to be short 50,000 in another two years, and we are dealing with the other factor of having one of the oldest workforces in Canada.

[George Chahal, Liberal, Calgary Skyview, AB]

Thank you.

Mr. Burgan, you spoke about looking at drivers and citizenship. I just want to make sure I'm clear on that remark, because many of our drivers are permanent residents and/or citizens, and many do come in as foreign workers as well.

Could you clarify that for the record, just in case you misspoke, or was that what you were intending to say?

[Omar Burgan]

That is what I was intending to say. You're saying that currently a lot of drivers are permanent residents or on the citizenship path. That's correct, and that's great. I think if you look at the jobs from a market perspective, there's a high need for them, so from our perspective it's because these jobs are unattractive to most people living in Canada or to a lot of the new generation.

The industry has to find ways to make them more attractive, whether by offering a better work-life balance, better pay or better pensions. We hear constantly that a lot of people will take up the job and after a while say, “You know what, I can't do this. It's not worth it. I'm constantly away from friends and family.” We think the onus should be on the industry to examine why it can't attract people, because there are workers everywhere.

There's an unemployment rate. We don't have 100% employment in Canada, so I think it's just a matter of attracting people who might have gone to other industries where they felt like they could have a better life.

[George Chahal, Liberal, Calgary Skyview, AB]

I just want it to be clear so there are no misconceptions. Many foreign workers come and apply to become permanent residents and then apply for citizenship. That's a part of that process, and I'm grateful to all of those who go through that, because it's important for the industry.

I have a question for the CTA on truckers' rights. I'm looking at the different provinces across Canada with different experience, rules and insurance requirements. Do you believe that we need to have some sort of a bill of rights for drivers?

I'll start with you, Mr. Burgan, on that and then go to the trucking alliance.

[Omar Burgan]

Your question is whether there should be a bill of rights for—

[George Chahal, Liberal, Calgary Skyview, AB]

I mean to protect drivers' rights. We've seen a number of challenges in Peel Region, a number of stories in the Toronto Star, and in Alberta as well. How do we ensure that those drivers are trained, but also that as drivers they have their rights protected so they're not taken advantage of? You've talked about the underground economy, Driver Inc., and how different provincial rules across the country may be contributing to that.