Madam Speaker, the member for Kelowna—Lake Country is also our shadow minister for export promotion and international trade; I will probably step on her toes a bit, talking about supply chain. She was also the 2006 RBC Woman Entrepreneur of the Year and, like me, she is an alumni of the University of Calgary, so to her I say:
[Member spoke in Gaelic]
“I will lift up my eyes” is a translation from Gaelic.
I will also be stepping on the toes of our shadow minister for infrastructure, the member for Regina—Qu'Appelle.
Unfortunately, this is a situation today where the government could not fail. The stakes were just too high for the government to fail. We have talked about it a lot today, but I will repeat some of the core facts again.
The Port of Montreal is the second most important port in Canada. The previous 19-day work stoppage last summer cost wholesalers over $600 million in sales over a two-month period. It took three full months to clear the backlog created by the stoppage. I am also sure we have heard previously today that every day the port is shut down, the economy loses $10 million to $20 million. The words of my leader earlier this week are true: Because of the Prime Minister's failure to get a deal done, jobs and contracts are at risk and millions of dollars will be lost.
I am going to approach this from the transport perspective today, as I am the shadow minister for transport. I am going to look at three things in particular: imports, which affect the cost of living; exports, which affect our economy; and then processes and infrastructure, which of course also affect our economy.
When we are talking about imports and the cost of living, and Canadians are seeing the cost of living increase, RBC expects that groceries alone will go up 2% to 2.5% in 2021. We can look at a couple of things. The first thing is the change in demand that we have seen over the last year. Canadians have been at home throughout the pandemic. They are unable to travel. They are unable to go to the theatre or to their favourite restaurants, as a result of several lockdowns, and so we are seeing a much greater demand for consumer goods. Of course, this is putting additional pressure on our supply chain.
The second thing, and this has been brought up previously, is the container shortage which is having significant impact on supply of goods. For example, India, the world's second-largest sugar producer, exported only 70,000 tonnes in January, less than a fifth of the volume shipped a year earlier. In addition, Vietnam, the largest producer of the Robusta coffee beans used to make instant drinks and espresso, is also struggling to export. Shipments dropped more than 20% in November and December, so we are seeing very big changes in supply there.
As well, we are hearing that:
The strike at the port isn’t necessarily going to shut down (auto) production, it’s just going to make the supply chain even more inefficient and increase costs.... Canada, as a manufacturing jurisdiction, we have to constantly compete with the United States and Mexico. And a critical component of being a competitive manufacturing jurisdiction is having a reliable trade infrastructure.
That was in the Financial Post.
We have seen action from the U.S. government in regard to the container shortage, but not here. Perhaps that is the reason why the Freight Management Association of Canada sent a letter to the Minister of Transport, using the example that, “pulse growers and lumber exporters are 'losing international sales' while shipping companies are sending empty containers back to Asia”.
One last example I will give of the strain on supply is right here in my hometown of Calgary. Bowcycle cannot import enough bicycles. Have members tried to buy a bicycle last spring or this spring? I have, for my son. They are almost impossible to come by, but these are the problems we are seeing as a result of the government's inability to handle supply chains and to handle our port capacity. That is why it was so critical that this deal get done.
Port backups are described as the worst ever, and delivery times are the longest in 20 years of data collection. In addition, a federal maritime commissioner described the west coast backups as the worst that we have ever seen.
Finally, I have the following quote:
In December, spot freight rates were 264% higher for the Asia to North Europe route, compared with a year ago, according to [a] risk intelligence solutions manager at [a] supply chain risk firm.... For the route from Asia to the West Coast of the U.S., rates are up 145% year over [last] year.
Again, we are seeing a decrease in supply, resulting in the cost of living being driven up as a result of the government's inability to handle its supply chains. Let us talk about the impacts, which I know that my colleague who spoke previously heard about, in terms of stakeholder quotes, as well as in conversations with stakeholders.
Karen Proud, CEO of Fertilizer Canada stated:
Hundreds of thousands of tonnes of fertilizer enter Canada through the Port of Montreal during the spring seeding season. These fertilizer products are destined for farms across [Ontario and Quebec and the Atlantic provinces] … and ensure that farmers are able to produce the crops that keep our grocery aisles full.
These products are now in jeopardy as the result of the strike at the Port of Montreal, so we are seeing the impact of the government's inability to manage the port's supply chains and, unfortunately, this dispute is having on our exporters.
Brad Chandler, CEO of Hensall Co-op stated that, “Hensall Co-op is Canada's largest exporter of edible dry beans and non-gmo soybeans.... We have established relationships with customers in over 40 countries.” These relationships are currently at extreme risk. That is what businesses need right now. They need certainty. They need stability through supply chains. The government is not providing the means for these exporters to have it and it is putting the economy at risk.
Greg Cherewyk, President of Pulse Canada said that, “it was imperative to avoid a labour disruption that would damage the Canadian pulse and special crops industry, our international reputation, and the wider economy.” That is another example of the failure of the government to manage supply chains and this dispute.
Finally, from Ron Lemaire, President of the Canadian Produce Marketing Association, “There is also significant concern that a labour stoppage at the Port of Montreal would aggravate backlogs in other shipping modes, including rail as shipments are forced to be diverted, particularly as Canada continues to grapple with the economic impacts of the COVID-19 pandemic. It is of utmost importance that the Government of Canada use every tool at its disposal to avoid job losses, increased food insecurity and higher food prices, all which could result from a strike.”
Let us talk then for a couple of minutes about processes and infrastructure of our supply chains which touch closer to the transport file.
KPMG recently made some recommendations in regards to how businesses can adapt to these supply chain challenges. What are businesses doing? They are examining micro supply chains. They are starting to reduce risks, rather than costs, which is a scary thought to consider that businesses are doing this. The KPMG CEO outlook survey indicated that around two-thirds of CEOs believe that their supply chains are in need of a complete redesign. The government should take note from these CEOs.
Many stakeholders believe that the government does not have a handle on its supply chains. Were I the minister of transport, my first task would be to map out all modes of these supply chains, so that we would understand completely where the faults lie. In addition, stakeholders believe that the government does not use data and metrics to the greatest benefit possible, in an effort to amplify and maximize our supply chains.
Finally I will go to infrastructure. In conversations with the Port of Vancouver, unfortunately, I must say that the expansion of the Port of Vancouver, which is so desperately needed, is currently under review with the current environmental minister. Increasing capacity is crucial. Many members of the Port of Vancouver board believe that they will run out of capacity by the mid-2020s. Our infrastructure capacity gap is growing and other countries believe that our ports do not have the capacity for the current demand of goods.
In closing, I will say that the government and the Prime Minister's actions have been too little, too late. I have seen it with the aviation sector. I have seen it with the supply chain capacity and, unfortunately, we have seen it here with the Port of Montreal dispute resolution.