Letter to Industrial Inquiry Commission regarding longshoring labour disputes at Canada’s West Coast ports.

July 31, 2024

Mr. Vincent L. Ready
Chair, Industrial Inquiry Commission
Labour Arbitration & Mediation Services Ltd.

Ms. Amanda Rogers
Member, Industrial Inquiry Commission
Amanda Rogers Dispute Resolution

Mr. Ready and Ms. Rogers:

On behalf of the Canadian Chamber of Commerce, thank you for opportunity to provide the Commission with a submission establishing our views on the terms of reference for your inquiry into the underlying issues in longshoring labour disputes at Canada’s West Coast ports.

Of note, the fifth point in your terms of reference is of particular consequence given the increasing number of labour disruptions in recent years disproportionately impacting our supply chains:

whether there may be voluntary collective bargaining dispute resolution processes, ad hoc or standing, such as mediation-arbitration that might assist the parties in resolving recurring issues arising between them;

This review is an opportunity to advise the federal government they require effective dispute resolution tools to act in the broad public interest to prevent severe damage to our economy and the livelihoods of Canadians, such as recourse to compel independent binding arbitration.

By way of background, the Canadian Chamber of Commerce is Canada’s largest and most activated business network — representing 400 chambers of commerce and boards of trade and more than 200,000 businesses of all sizes, from all sectors of the economy and from every part of the country — working to drive change, partner broadly and be the undisputed champion and catalyst for the future of business success. Our vision is to build a Canada of thriving business opportunity, a strong economy, and a better life for all.

You are undertaking this review at a critical moment for the country, as our trading partners are asking themselves if we can, quite literally, deliver the goods. Over the past few years, our supply chains have been contending with unpreventable disruptions such as floods, wildfires, and the COVID-19 pandemic. Now, after more than three weeks of strikes across the ports in British Columbia and the St. Lawrence Seaway in 2023, we are threatened by even more disruptions that only serve to advertise to the world that Canada is closed for business.

The Canadian Chamber’s Business Data Lab analysis of Employment and Social Development Canada data concluded that in 2023, Canada lost the most days to labour disputes since 1986. Business uncertainty is steadily climbing, while confidence in Canada’s reliability as a trading partner continues to deteriorate.

With $3.6 billion worth of goods and services crossing the longest international border in the world in 2023, the potential for job action from our border agents raised considerable concerns from our largest trading partner and closest ally, the United States. Against the backdrop of a review of the Canada-United States-Mexico Agreement, ensuring our global reputation is not diminished any further must be a focus, or we risk undermining ourselves during those talks.

Unfortunately, concerns persist, as we face potential strikes in both of our Class I railways. According to the Railway Association of Canada, our two freight railways transported a total of more than $380 billion worth of goods in 2022, and approximately half of the country’s exports. With our railways running 365 days per year, a strike interrupting service on both railways’ Canadian networks is estimated to impact the flow of more than $1 billion of goods every day.

As trade accounts for more than two thirds of Canada’s GDP, our ability to get goods to and from market determines whether we will be competitive in the global economy, but our supply chains are only as strong as their weakest link. This is not the time to put further strain on a system that is under pressure and once again jeopardize Canada’s reputation as a stable place to do business; we need to ensure our supply chains are reliable and resilient.

As you know, a strike vote is currently underway that could lead to yet another shutdown of the very west coast ports you are currently reviewing for a second year in a row. We simply can’t afford to repeatedly shut down trade infrastructure responsible for the movement of $800 million worth of cargo every single day, accounting for 25 percent of Canada’s total traded goods.

With the addition of a potential strike at the Port of Montreal, Canadians need to believe changes are coming to restore some confidence in the labour dispute resolution process; their businesses and their families are relying on the flow of goods, not only for the products they use every day, but also for the trade that their livelihoods depend on.

Last year’s strike resulted in significant impacts on specific industries as well. One of Canada’s largest overseas exporters, Canpotex, has approximately 70 percent of their potash handled by Neptune Bulk Terminals in North Vancouver. Despite maximizing their terminal at the Port of Saint John and through the Port of Thunder Bay prior to the strike, there was little capacity elsewhere in Canada to divert shipments, resulting in a heavier reliance on ports in the United States. When the strike was resumed, Canpotex announced they were withdrawing all new sales offers, an unprecedented step in their 51-year history.

Impacts overseas are important to note as well. A country’s crop seasons mean potash shipments are time-sensitive in nature, and these disruptions have a direct impact on global food production. As an example, Indonesia is the world’s 5^th largest potash consumer, and potash is the largest Canadian export to that country. Following the B.C. Ports strike, however, Russia replaced Canada as Indonesia’s leading potash supplier.

Due to the perishable nature and sheer volume of many of our exports, a prolonged delay is not a manageable prospect. Canada exports approximately 70 percent of its pork production and 50 percent of its beef production, with our west coast ports being key to trade relationships for these products in Asian countries like China and Japan. Moving and shipping goods to market quickly via a reliable supply chain is critical to their business model, and limited storage capacity means stockpiling unshipped goods is a not realistic, without even considering the complexity and additional time required to restart operations after a stoppage.

The range of industries impacted is wide-reaching: businesses looking for replacement parts to fix machinery were delayed, causing production to slow or stop, while fruits and vegetables that we bring to Canada were left to rot in containers as opposed to making it onto shelves. Trade through our gateway to Asian includes electronics, fashion, appliances, construction materials, cars, canola, wood pulp, sulphur; the list goes on. Plain and simple, Canadians families who were already contending with an increased cost of living were faced with greater inflationary pressures, while the inability to move goods put contracts for Canadian businesses and Canadian jobs at risk.

The increased frequency of labour disruptions impacting our supply chains is of great concern and brings into focus the government’s inability to mitigate resulting economic consequences. To that point, we recently saw a strike by WestJet mechanics that stranded passengers during the busiest travel weekend of the summer, despite an order for binding arbitration.

Disruptions will be expected to increase with the passing of a ban on the use of replacement workers, according to the government’s own discussion paper on the matter, meaning your review is an opportunity to advise government it will need additional dispute resolution tools to protect and restore certainty to our supply chains when needed.

Among them, the Minister of Labour must have the ability to act in the interest of Canadian families and our economy to resolve disputes by compelling independent binding mediation arbitration.

Our members from across the country have been calling for stability so they can plan appropriately and conduct their business with the confidence that they can rely on our supply chains to get goods to and from market. We urge you to take this opportunity to ensure they can.

Sincerely,

Pascal Chan

Senior Director, Transportation, Infrastructure & Construction
Canadian Chamber of Commerce