Effects of Longshoremen's Strike on Canadian Trade: Insights from Professor Bruno Larue and Canadian Chamber of Commerce

2023-07-04 07:18:48

Interrupting longshoremen’s work can create scarcity phenomena for certain products, explains Professor Bruno Larue, holder of the Canada Research Chair in International Agri-food Trade.

This can temporarily increase prices, adds the professor at Laval University in Quebec, while adding that, in some cases, importers will have anticipated the labor dispute and will have a little more inventory in their warehouses.

Of course, if the conflict is [là] to last, this will end up having effects on prices, adds Bruno Larue, emphasizing that he supports federal government intervention.

Frankly, the senior director of transportation, infrastructure and construction at the Canadian Chamber of Commerce, Pascal Chan, says he is deeply troubled, because this strike will have an impact on the ports on the west coast of Colombia in particular. British.

“Twenty-five percent of goods traded in Canada pass through these ports. Every day, this represents 800 million dollars in costs, therefore, more than 5.5 billion dollars per week. »

— A quote from Pascal Chan, Canadian Chamber of Commerce

Several industries will suffer the consequences of this strike, the retail trade, all the products consumed on a daily basis from agriculture, or even the automobile. Supply chains are fragile, he describes.

All the ports of British Columbia have been paralyzed since Saturday by the longshoremen’s strike, starting with the port of Vancouver, which is by far the largest in the country, ahead of Montreal. Vancouver is the hub of trade between Asia and Canada. The business community fears economic repercussions across the country, including in Quebec. A report by Marie-Claude Morin.

The port of Prince Rupert in northern British Columbia is the third largest in the region. About 4,000 people in the community work in the port industry, according to Mayor Herb Pond. So there’s no one in town who isn’t affected in some way [par cette grève]he said.

Part of the Port of Prince Rupert terminal should also double its capacity by 2026 thanks to funding from Ottawa. The mayor insists on how essential it is not to lose the jobs of the workers, because these people want to go to work.

A deja vu

Pascal Chan asserts that this strike will affect all Canadians: Considering the volume that passes through the ports in British Columbia, we can expect severe losses.

Since Saturday, July 1, thousands of BC port workers have been on strike.

Photo : Radio-Canada / Ben Nelms

An interruption of supply chains would increase the cost of living, a fact already demonstrated during the COVID-19 pandemic, as observed by Pascal Chan. The hypothesis is also confirmed by the vice-president of national affairs of the Canadian Federation of Independent Business (CFIB), Jasmin Guénette.

« [Cette grève] can absolutely harm [la] reputation [des ports de la Colombie-Britannique]. These are troubling economic times. »

— A quote from Pascal Chan, Canadian Chamber of Commerce

Jasmin Guénette predicts that small and medium-sized businesses will be hard hit. So, we can potentially talk about revenue losses for SMEs. He mentions, among other things, inventory losses if the products are not sent or received quickly, or even costs due to contracts that are not respected.

A strike in an inflationary period

If the strike only lasts a few days, the impact is easier to manage, assures Jasmin Guénette, but if it lasts several days, even a week or more, that’s when it becomes really stressful and distressing.

The BC port workers’ strike could have an impact on global freight transportation.

Photo: The Canadian Press/DARRYL DYCK

Jasmin Guénette refers to the economic losses of businesses, including perishable products that remain in port or are not transported. He is also in favor of an intervention by Ottawa if the union and the management party are unable to reach an agreement: Either [Ottawa] maintains trades while trading, or [il] introduces a special law.

In a tweet, the Premier of Alberta, Danielle Smith, in turn urges the federal government to act. The strike action risks causing significant economic harm to families and businesses across Canada, including in Alberta, she writes.