Transport Committee on Oct. 19th, 2022

[The Chair, Liberal, Peter Schiefke]

I call this meeting to order.

Welcome to meeting No. 34 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, we have appearing before us today, from the Canadian Ferry Association, Mr. Serge Buy, chief executive officer.

We will hear the director of government and stakeholder relations of the Chamber of Marine Commerce, Mr. Maguessa Morel‑Laforce.

From the Freight Management Association of Canada, we have Mr. John Corey, president.

Before I turn to our witnesses for their opening remarks, I'd like to begin by turning it over to the clerk for some housekeeping. I believe we have to elect a vice-chair.

Mr. Clerk, go ahead.

[The Clerk of the Committee, Mr. Michael MacPherson]

Thank you for that.

Pursuant to Standing Order 106(2), the first vice-chair must be a member of the official opposition.

I am now prepared to receive motions for the first vice-chair.

[Dan Muys, Conservative, Flamborough—Glanbrook, ON]

I would nominate Mark Strahl.

[Annie Koutrakis, Liberal, Vimy, QC]

I was going to nominate the same.

[The Clerk]

It has been moved that Mark Strahl be elected as first vice-chair of the committee.

Are there any further motions?

Is it the pleasure of the committee to adopt the motion?

(Motion agreed to)

I declare the motion carried and Mark Strahl duly elected first vice-chair of the committee.

[Voices]

Hear, hear!

[The Chair, Liberal, Peter Schiefke]

Congratulations, Mr. Strahl.

We will begin the opening remarks with Mr. Serge Buy.

Mr. Buy, you have five minutes. The floor is yours.

[Serge Buy, Chief Executive Officer, Canadian Ferry Association]

Thank you very much, Mr. Chair, for inviting the Canadian Ferry Association to speak on this important issue.

First, let me provide you some background on the sector.

Ferries in Canada annually transport over 60 million passengers, 23 million vehicles and billions of dollars' worth of goods. Our members provide a crucial linkage to communities. They cross rivers in isolated communities in rural and northern Canada, an example that most do not fully realize. There are free ferry crossings along the Dempster Highway in the Northwest Territories to get to Inuvik; when ferries do not run, the cost of goods significantly increases in that city.

Ferries bring not only people but also most goods to islands such as Newfoundland and Vancouver Island. We also provide urban transit solutions in various municipalities, such as Toronto, Halifax, Vancouver and others.

The Canadian Ferry Association represents most ferry operators across Canada, from Crown corporations to indigenous, provincial, territorial and municipal governments and private operators. We also represent some of the suppliers to the sector.

The issue of labour shortages is not new in the marine sector. Indeed, we have an aging workforce. An informal survey of our members sent out in 2019 showed that about 55% to 62% of the employees holding senior positions were able to retire within five years. The pandemic has made the issue even more pressing. We have seen unprecedented levels of retirement in the past couple of years.

The result is simple. There are increasing numbers of ferry crossings that are cancelled due to labour shortages. This weekend, some ferry crossings between Kingston and Wolfe Island in Ontario were briefly cancelled, as the operator was looking to replace a crew member. You can see weekly in the media instances of crew shortages on the west coast, the east coast and indeed throughout Canada, even in the Prairies, where this is the number one issue for our operators there.

The brief we submitted to the committee provides some of our recommendations. To be clear, Mr. Chair, there is no magic wand that will solve the issue. There are multiple directions to be explored, and each will have an impact.

The financial impact of labour shortages in the ferry sector is important. It means goods not arriving or arriving late. It means higher prices for some products. It means that employees are not getting to work because they can't get the ferry. It also means that people may not be getting home in time or getting to their hospital appointments, etc.

Ultimately, it is about communities. That's why it is essential for us to remember that when ferries do not run, entire communities are affected.

There are many considerations. I would like to explore some with you.

Immigration will not solve all problems, but it is an important avenue to look at. We thank Transport Canada for having taken some steps in the right direction, with support from Global Affairs, on the signing of agreements recognizing credentials, but more can be done, and more needs to be done soon.

Technology is also an important consideration, but the regulations that need to accompany the use of new technology also need to follow, and we're seeing challenges in that.

Can working conditions be improved? Absolutely, always, but I would say that ferry operators are normally employees of choice, and working conditions are very good already. Raising salaries may attract a few people, but then others will raise their salaries, and this endless race to poach each other's employees will end up benefiting no one.

Employers, unions and training institutions will have a role to play. This is why, for example, you will see some recommendations in our brief that deal with hybrid, in-person, and virtual training.

The recommendations provided in our brief are in four categories: international recruitment, where, again, signing agreements with other countries is essential; training, from virtual training to changing the requirement that sees institutions in the marine sector refuse international students; modernizing, in terms of crewing requirements that deal with technology, and the need to modernize some regulations and adopt a risk-based approach; and data, where better data collection needs to occur to have a clearer picture of the existing issues.

Mr. Chair, I look forward to questions. Thank you.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Buy.

Our next witness is Mr. Maguessa Morel‑Laforce from the Chamber of Marine Commerce.

Mr. Morel‑Laforce, you have five minutes.

[Maguessa Morel-Laforce, Director, Government and Stakeholder Relations, Chamber of Marine Commerce]

Mr. Chair, honourable members of the committee, I am grateful to you for giving us the opportunity to speak with you today.

The Chamber of Marine Commerce represents more than 100 marine industry stakeholders, including major Canadian and American shippers, ports, terminals and marine service providers, as well as Canadian domestic ship owners.

The Canadian marine sector moves goods and people everywhere in Canada. Of all the transportation modes, ours is the one that has the least impact on the environment.

During the pandemic, seafarers and shore personnel were designated essential workers and have continued their important work to ensure that Canada's supply chain remains resilient and responsive to deliver the goods that Canadians count on.

Canada has an extensive network of private docks and public ports used for international trade and moving people, all of which underpin national industries. Some 200 Canadian ships are operated in the country for commercial purposes, which include trade between Canada and the U.S., and domestic trade as well. The Canadian marine sector, both private and public, has over 1,000 employers and more than 100,000 professional employees.

Helping to build the domestic marine sector workforce ultimately benefits other key sectors of the economy—agriculture, construction, manufacturing, natural resources and tourism—that rely heavily on having access to marine transportation for their supply chain requirements.

The marine industry falls under federal regulations which cover most of the positions on a commercial vessel. However, the federal government offers little support to training institutes and to students in the marine sector. The federal government should provide regular funding to support the training of new employees for the private sector, the Coast Guard and other areas of our sector where we are lacking personnel.

Unfortunately, my colleague, Julia Fields from the Canadian Marine Industry Foundation, could not be here with us today, so I will give the presentation that she prepared.

The Canadian Marine Industry Foundation was launched in 2020 to help address workforce development challenges in the private and public marine sector. Our partners include employers, such as marine shipping companies; unions; pilots; marine colleges; as well as key government departments that have maritime responsibilities, including the Canadian Coast Guard, Transport Canada and the Transportation Safety Board.

Like our multimodal partners in trucking and rail, we have a tremendous challenge ahead. The Canadian marine sector is already struggling to fill positions across the country, and in recent years labour shortages have even led to ships being idle temporarily. Marine colleges are finding it difficult to hire teachers, and government agencies are competing against private companies for the same small and aging talent pool. For the most part, the marine industry operates efficiently and often quietly away from the public eye. Consequently, awareness of marine sector careers is low. Most youth and those looking for a second career do not think of seafaring or many related career paths within the industry.

You should be aware that labour market data for the marine sector is scarce, and what does exist is usually dated or incomplete. However, a recent study conducted by Transport Canada found that 43% of the Canadian marine transportation workforce is expected to retire over the next 10 years. This figure is even higher in critical positions, such as engineering officers and deck officers. Transport Canada estimates that there will be a need to hire approximately 19,000 new workers over the next 10 years.

It is important to note that building our future pipeline is an urgent problem, as the marine sector depends on an ongoing talent pool willing to undergo specific training at all levels. It is a skill-intensive industry for shoreside and, especially, seagoing positions. For example, becoming a captain on a larger commercial ship can take six to eight years.

We believe the federal government could help us in three key areas. These are areas in which many other sectors have received government assistance.

The first is working with us to improve marine sector labour force data analysis to better identify the true scope of the problem and to benchmark and track progress.

The second area is funding to help increase awareness, as a variety of marine career paths, high wages and high job match rates are largely unknown to the general public, particularly high school students.

The third is to work with the sector to improve the availability, reach and funding opportunities of training programs. There are limited numbers of marine training facilities or colleges in Canada, and many prospective students would need to travel and pay for both program tuition and living expenses. As a result, marine training can be difficult to access for many communities and also for workers already in the industry who are looking to upgrade their skills and licences.

As an example, two of our college members have recently applied for funding to develop new program offerings that will help lower the overall cost of training and increase marine training accessibility for first nations and equity-deserving groups. These programs include increasing online courses and accelerating the adoption of virtual reality and simulation in marine training.

Thank you very much for the opportunity to speak on behalf of the marine industry in Canada.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Morel‑Laforce.

Next, we have Mr. Corey.

Mr. Corey, the floor is yours. You have five minutes for your opening remarks.

[John Corey, President, Freight Management Association of Canada]

Thank you, Mr. Chair.

I'd like to thank the committee for the opportunity to speak today about anticipated labour shortages in the Canadian transportation sector.

The FMA represents purchasers of freight transportation in Canada, including rail, marine, air and trucking. I hope I'm in the right meeting, because I will be speaking about rail and trucking labour issues.

Like other G7 countries, we have an aging population and a low birth rate. Our recent COVID experience has highlighted the reality that there are not enough skilled workers to fill all vacancies. Coupled with the pandemic, work-life balance has become a more important factor for workers. Salary alone is no longer a chief motivator.

How is this affecting transportation services and the supply chain? We have all experienced the supply chain chaos that was exacerbated by COVID. At the beginning of the pandemic, Transport Canada deemed both rail and trucking services to be essential. Truckers and rail workers helped Canada continue to function during COVID by continuing to move vital food, fuel, PPE, chemicals and other necessary materials. Without this transportation service, the effect of the pandemic would have been much worse.

Even though transportation workers performed admirably and the job got done, there are two main labour problems.

First, we have an aging workforce. Generally, the baby boomers who powered the economy through the 1980s, 1990s and 2000s have left the workforce or are retiring en masse. There are not enough skilled workers to adequately replace them. Not everyone can work from home.

The truck driver shortage continues to be a problem. The Conference Board of Canada now finds that the average truck driver's age is 46 years, compared to the average for all workers, which is 41.5 years. The industry needs to attract younger workers. It's estimated that there are 23,000 driver vacancies right now, and that will go up to 56,000 by 2024. This does not bode well for the Canadian economy, going forward.

In the rail industry, rail crew and locomotive shortages—not railcars—are recurring problems through periods of negative network fluidity. There is a great concern in the shipper community that the above-average grain crop this year, the coming winter and the staff shortages will create chaos on the rails, going forward.

The second employment issue is a changing attitude toward work. Workers are looking at work differently today from how they did in the past. COVID did not cause this change, but it has certainly sped it up. Working from home, virtual meetings and the demand for a better work-life balance are issues currently on the table.

Employee turnover in the trucking sector is very high—around 70%. Drivers routinely leave their employer or the industry. This turnover can be attributed to long hours, pressure to deliver, poor food and rest conditions on the road, and lack of recognition and appreciation.

In the rail industry, the practice of precision scheduled railroading, operations focusing on sweating the assets, does not apply only to equipment. Staff is cut to a bare minimum, resulting in increased pressure on the employees who are left.

In the U.S., railways and unions are currently working out their labour agreements. Although wages will go up 24% over the next three years, some union members are not ratifying agreements, because they say management holds no regard for their quality of life—illustrated by their stubborn reluctance to provide a higher quantity of paid time off, especially for sickness. Employees feel management is more concerned about operating ratios and profits than workers' well-being. It's no wonder they can't find anyone to employ.

What are the possible solutions?

One way to increase the number of workers available in the short term is by increasing immigration. I understand this solution may not be that simple, but it is worth the effort. Let’s remember that Canada is a country built with the help of people from many places.

Pay an hourly wage to truck drivers, which will prioritize safety, thereby reducing the “need to get there at any cost” mentality. Require new energy-efficient trucks and encourage digitalization of the industry. Make trucking a skilled trade; many trades require an apprentice program and mentoring, especially in Europe. Make trucking a vocation instead of a default career. Ensure there is sufficient funding for the infrastructure necessary for the future. Ensure there are more safe places for drivers to eat and rest.

Railways need to be more cognizant of the labour market realities and their customers’ service requirements when downsizing their workforce in response to temporary volume downturns. Excessive cuts followed by deliberately slow restaffing should not be an option. Leave some slack in the system, and make the supply chain more resilient.

Provide better working conditions for rail workers, with less punitive action for legitimate time off. Having more workers working fewer hours results in safer working conditions and a happier and therefore more productive workforce.

Thank you very much.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Corey.

We'll begin our round of questioning today with Dr. Lewis.

Dr. Lewis, the floor is yours. You have six minutes.

[Leslyn Lewis, Conservative, Haldimand—Norfolk, ON]

Thank you so much.

My first question is going to go to Mr. Morel-Laforce.

We've heard a lot of discussion about labour shortages. I am aware that there was approximately a 20% reduction in grain shipment last year in the Great Lakes and St. Lawrence Seaway. You spoke about some of the collateral effects of the labour shortages and you mentioned that even ships were remaining idle because of the labour shortages.

I'd like to talk about how that impacts our food supply chain. I'm assuming that this also created a problem of congestion at the ports because of the shortage of labour, because you would have shipping containers sitting at the ports longer.

Is there anything you think the government could do legislatively in order to modernize the Canada Marine Act to help with this problem? That's my concern.

[Maguessa Morel-Laforce]

It is a vast question.

On the grain shipments, most of the grain will be exported in bulk cargo, so your typical route will be going either west or east. In the case of the Great Lakes and St. Lawrence, the cargo will be moved by train, let's say to Thunder Bay. From there, it will be put on a laker and brought further east for export. Most of the grain in the country is being exported.

In that regard, the seaway has a capacity right now at about 50%, so we could double the number of ships crossing the seaway today without much impact on traffic. That's certainly something we could do, although manning vessels and manning them in the future could become a difficult thing to do.

[Leslyn Lewis, Conservative, Haldimand—Norfolk, ON]

I understand that currently the Great Lakes and the St. Lawrence Seaway are operating at just 50% capacity. Is that correct?

[Maguessa Morel-Laforce]

Yes. Right now we could double the number of ships sailing in the Great Lakes and St. Lawrence with the current infrastructure we have.

[Leslyn Lewis, Conservative, Haldimand—Norfolk, ON]

The reason you haven't been able to increase the usage of the waterways to alleviate pressures on the primary ports is this inherent labour shortage problem.

[Maguessa Morel-Laforce]

It is, and I would say that container shipping is highly limited right now because of CBSA regulations that prohibit containers moving on ships. They can be moved on trains or trucks, but they cannot be moved by ship. We know that several of our port members within the Great Lakes are asking to have sufferance warehouses where they could actually host those containers, which is something that is not happening.

[Leslyn Lewis, Conservative, Haldimand—Norfolk, ON]

I understand that the Canada Marine Act limits the Canadian port authorities' ability to generate additional financing and remain competitive by actually limiting the ability to develop inland ports. The development of inland ports would reduce congestion at primary ports. In places like Vancouver, we know there are inland ports, but those ports are owned by the Singapore port authority.

Do you have any explanation why the government permits Singapore to own inland ports, but not Canadians?

[Maguessa Morel-Laforce]

I am not familiar with that port, in particular.

What I do know is that port members are currently anxious to see the port modernization act tabled in Parliament. They have several requests. They would like to develop their land and also expand their capacity to borrow, to make more development. That is certainly something that port members are keen to see in upcoming amendments to the port modernization act.

[Leslyn Lewis, Conservative, Haldimand—Norfolk, ON]

Is there anything specifically that you believe this government can do to remedy the unfair treatment of Canadian port authorities?

[Maguessa Morel-Laforce]

I believe we could use the Great Lakes and the St. Lawrence Seaway to their full capacity to alleviate pressure on other modes of transport that have been touched by the pandemic or that are at capacity. We can think about our road system, which is already congested. If we put more containers on ships, rather than on trucks, we would move more product faster inland without congesting the highways.

[Leslyn Lewis, Conservative, Haldimand—Norfolk, ON]

That's not necessarily fixed by having inland ports. It's just getting the product to the rail.

[Maguessa Morel-Laforce]

The fix would come with regulations. We would need to see CBSA regulations amended to allow for the movement of containers via the national waterways.

We would also need to see the CBSA expand and approve more sufferance warehouses. I hear there are 17 applications right now on the CBSA's desk that are not being processed. That could certainly help leverage the container problems in this country.