B.C. port workers strike will have ripple effects across the economy

Source: Vancouver Sun; Financial Post; CBC 
Date: 5th July 2023

Groups representing Canadian businesses want the federal government to intervene in the strike.

The B.C. port strike, which entered its fourth day on Tuesday, is already having ripple effects across the economy, with trucking companies grounded and fears that consumer prices will soar as supplies dwindle.

The manager of a trucking company said about 100 employees are without work because no containers are moving in or out of the Port of Vancouver.

“It’s come to a complete halt,” he said. “So the container division of the company has totally stopped. All of those drivers are at home right now because they’re not able to access the ports.”

More than 7,400 members of the International Longshore and Warehouse Union Canada, who load and unload cargo at more than 30 B.C. ports, have been on strike since Saturday. Talks between the union and the B.C. Maritime Employers Association have stalled.

Ports in Metro Vancouver and Prince Rupert are “critical infrastructure” that handle a quarter of Canada’s international trade, said a UBC Sauder School of Business Professor.

“When it shuts down, it affects the entire economy very quickly,” UBC Sauder School of Business said. “And so, this labour dispute has an outsized effect. Anything more than two weeks is going to start carrying significant risks for the economy.”

Businesses that rely on products shipped from Asia, for example, will quickly run out of inventory, forcing them to reroute products from ports in Seattle or other suppliers. That will make the product more expensive and the cost will be passed to the consumer.

It’s a huge impact and some people don’t fully recognize how much of an impact (the strike) has on raising the cost of these goods.

The impasse between the union and employer is over wages and the union’s concern that port automation and outsourcing will put members’ job security at risk. About 6,000 of the unionized workers are in Metro Vancouver, 1,000 in Prince Rupert, and the rest in Nanaimo and Port Alberni.

Groups representing Canadian businesses want the federal government to intervene in the strike, with one organization calling for legal changes that would discourage future disruptions.

Canadian Manufacturers and Exporters say designating ports and rail lines as essential infrastructure, and limiting when and where labour and other disruptions can occur, would provide manufacturers with the stability they need.

The group, which says its members account for about 82 per cent of total manufacturing production and 90 per cent of Canada’s exports, estimates that $500 million worth of goods is being disrupted every day.

The Greater Vancouver Board of Trade is asking Ottawa to “use every tool at its disposal” to ensure a deal is struck to resume activity at the city’s port, including back-to-work legislation, if necessary.

In 2021, the federal government passed back-to-work legislation that forced the Port of Montreal’s 1,150 dock workers to end their strike at one of Canada’s busiest ports.

The President and CEO of the Greater Vancouver Board of Trade said in a statement “a labour disruption at west coast ports will fuel inflation and damage already-fragile supply chains that were impacted by the COVID-19 pandemic, heat domes, and catastrophic flooding in recent years.”

B.C. ports move $800 million worth of cargo every day and those goods are vital for manufacturing, retail, agriculture, automotive, and energy industries across Canada.

Domestically with goods unable to move efficiently through west coast ports, businesses could experience delays in receiving essential raw materials, components, and finished products. Companies have already started to divert cargo to other ports, causing a loss of local economic activity and higher GHG emissions to get products into the country.

The federal government was being urged to work with the union and employers to reach a fair and expedient resolution to ensure Canadians have access to essential goods and protect Canada’s reputation as a reliable trading partner.

The Mining Association of Canada on Tuesday expressed “serious concern” about the “damaging effects” the port strike could have on the mining industry and the broader Canadian economy.

B.C.’s ports play an essential role in Canada’s mining supply chain, serving as central hubs for the transport of the critical minerals and metals essential to businesses both domestically and internationally,” the association’s CEO said in a statement. “Canada’s reputation as a trusted producer of these materials is in question if we are unable to rely on our transportation networks to get them to market.”

The mining sector is a major user of Canada’s ports and is the largest single shipping sector by volume by both rail and marine modes, according to the association. The majority of the mining products are shipped to international customers, accounting for 22 per cent — or $127 billion — of the total value of Canada’s exports in 2021.

A spokesman for B.C.-based mining company Teck Resources said the company is “taking action to mitigate any potential impact and have the flexibility to divert shipments through our other commercially contracted terminal capacity.” All Teck mines are continuing to operate normally, the company said.

Representatives for the B.C. Maritime Employers Association and the International Longshore and Warehouse Union Canada negotiated over the long weekend before the association issued a statement saying it didn’t think more bargaining would produce a deal.

The association said Tuesday that negotiations were “paused, pending further discussion with the federal mediators.”

The union has meanwhile accused the association of changing its position on a key issue at the last minute to “muddy the waters.”

Federal Labour Minister said in a tweet that federal mediators “continue to support” both sides in the negotiations.

“We encourage both parties to immediately return to the bargaining table and remain there until a deal is reached,” he said. “Collective bargaining is hard work, but it’s how the best, most resilient deals are made.”

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