Keeping Canada’s Economy on Track

By Will Holowaychuk
Policy Analyst

Reliability of Canada’s transportation systems is crucial for the agricultural sector and the economy. Farmers have faced increased difficulties in sourcing crops inputs, parts, equipment, and moving agricultural products to export due to labour disputes in the supply chain. These uncertainties create bottlenecks and cost the agricultural sector and the Canadian Economy millions of dollars. This status quo is unsustainable, and Alberta Canola and industry partners are urging government action.

Agriculture is heavily dependent on an efficient transportation system

Agricultural crop production relies heavily on the ability to import crop inputs through the port and rail transportation systems as well as for exports of commodity products. Over 90% of Canadian canola, worth almost $15 billion annually, is exported either as seed or processed products like canola oil or meal. Maintaining efficient port and rail systems is essential for this industry and others relying on these transportation networks. Considering the various natural resource and manufactured products across industries that are moved via rail and exported through ports, or the number of imported products used by Canadians, Canadians are impacted whether they realize it or not.

Ongoing labour disputes threaten the transportation system and economy. Strike action in any of these disputes would add frustrations to farmers abilities to sell and move their agricultural commodities and make day-to-day life more difficult for Canadians.

The Teamsters Union can shutdown national freight railways

The labour dispute between the Teamsters Canada Rail Conference (TCRC) and two major Canadian railways, Canadian National (CN) and Canadian Pacific Kansas City (CPKC), has been escalating. In early May 2024, approximately 9,300 workers authorized strike action due to stalled negotiations over contract terms. If the anticipated strike were to occur, potentially 70% of freight movement within Canada and half of Canada’s exports could be affected. Currently, the Canada Industrial Relations Board (CIRB) is reviewing the case, to identify what activities and products are essential to be moved in the event of a strike. This has delayed any potential strike action that can occur until a ruling from CIRB occurs. Nevertheless, the threat of this action has caused companies across the country to prudently develop and implement contingency plans to mitigate the disruptions if a strike does occur. Since 1993, nine out of the last ten negotiations CPKC has had with the TCRC have required federal conciliation support, so difficult negotiations and the potential of a strike has been a common occurrence.

CBSA labour dispute could exacerbate bottlenecks

The Canadian Border Services Agency (CBSA) staff are on the brink of a potential strike due to stalled negotiations with the federal government. A recent strike vote showed strong support among CBSA employees for job action if their demands are not met. A strike could significantly disrupt border operations, causing delays in processing at airports and land borders, and impacting trade and travel. A work stoppage would delay imports of crop input products, agricultural equipment and parts. Also, agricultural commodity exports could also be affected. Although a strike still looms large and could be imminent, both sides are working under pressure to resolve the dispute and avoid industrial action.

The 2023 Port of Vancouver Strike created months long backlog

The 2023 Port of Vancouver strike, lasting 13 days, caused significant delays and a months-long backlog, affecting farmers and the entire supply chain. This strike highlighted the vulnerability of the agricultural sector to transportation disruptions and the need for resilient supply chain strategies.

Conclusion

Ongoing labour disruptions pose a threat to Canada’s economy and agricultural trade reputation. Alberta Canola is advocating for reliable transportation systems, emphasizing the need for government support to prevent future disruptions. Reliable transportation is essential for delivering high-quality products and ensuring the success of the Canadian economy.