The future of business success needs trade infrastructure

By: Robin Guy, Senior Director of Transportation, Infrastructure, and Regulatory Policy, Canadian Chamber of Commerce

This article originally appeared in The Hill Times.

Canada has a serious infrastructure deficit. We have heard this for years. We, at the Canadian Chamber of Commerce, have been saying it for years. But what does it really mean? What does it matter? How do we fix it?

As a trading nation, Canada’s trade infrastructure matters more than for many other countries. Two out of every three dollars that Canada makes relies on moving goods. According to the Canadian Chamber’s Business Data Lab, nearly 30 per cent of businesses stated supply chain issues will continue to remain a key obstacle to growth and expect these challenges to persist well into next year.

This should come as no surprise, with events over the past two years bringing our infrastructure shortfalls to the forefront. From the global pandemic, to the wildfires and flooding in British Columbia, to physical disruptions due to blockades and strikes, our transportation system has suffered severe disruptions—both preventable and unavoidable—that have stretched it beyond its limits. The competitiveness of Canadian businesses and Canada’s reputation in international markets depends on reliable transportation infrastructure that allows goods to be transported in a timely manner. For example, sectors like agriculture and manufacturing rely heavily on goods imported from aboard. Approximately 70 per cent of goods for these industries are difficult to replace and reinforces the need for robust trade infrastructure to support real time supply chain delivery.

So, what’s the path forward?

First, the government must develop a vision for Canada’s trade corridors.

We need a vision from the federal government that demonstrates long-term commitment to trade infrastructure. While the National Trade Corridors Fund is a key pillar, the government currently lacks an overall vision for our trade corridors. The government must look to work with business to develop new gateway strategies, including for Western, St. Lawrence, and Arctic Gateways, that will better guide which projects are “shovel worthy.”

Each corridor strategy would set out how government will work with provinces, private sector, communities, and Indigenous Peoples to identify capacity challenges facing our corridor transportation systems and develop a pipeline of projects. Similar to the government’s previous Asia Pacific Gateway Corridors Initiative, these strategies provide a merit-based approach to project selection, guided by a vision that promotes economic growth.

Secondly, the government must commit long-term to building trade infrastructure.

Canada must make major, strategic investments in Canada’s trade infrastructure to grow and sustain our economy. This is not the sole responsibility of governments, but their leadership is critical. Our governments must act now or Canada’s economy will suffer. Without serious investment, we risk hindering Canada’s economic growth, competitiveness, and international reputation as a reliable partner for business.

Government needs to work with business to set clear priorities on infrastructure projects that will bring forward measurable economic returns. We must work together to triage projects that are critical to facilitating trade. These projects should include safeguarding critical infrastructure that will ensure our supply chains can continue uninterrupted if a primary route is damaged or blocked. Some of these investments include investing in projects that will expand rail in high-congested areas, as well as projects that increase bridge capacity to reduce congestion and speed up delivery.

Lastly, the government must adopt a regulatory competitiveness mandate and provide regulatory certainty.

Regulation continues to be a growing concern for many businesses with nearly 25 per cent who trade interprovincially citing red tape, such as differing certification and technical standards, as a major obstacle to doing business within Canada. Regulatory effectiveness is an integral dimension of competitiveness. Done right, it can be a competitive advantage. However, when regulations are not serving the public interest, or when they cause excessive costs to the economy, regulations hinder economic growth. It is important the government act now to make Canada’s regulatory environment more competitive and attract new economic opportunities.

Uncertainty and changing expectations in the regulatory process are a “poison pill” to those looking to invest billions of dollars developing new pipelines, new mines, and other large-scale nation-building infrastructure projects. We need predictable timelines to encourage capital investment. It can’t take a decade to approve infrastructure projects. Government must streamline its regulatory process and must adopt strict timelines for approving major infrastructure projects.

Our governments must look to address our infrastructure deficit today. The future of business success needs trade infrastructure. Without this, we are jeopardizing the economic growth and prosperity our country needs.