“Major damage” to the economy — that’s how experts describe the potential impact of a looming strike among cargo loaders in British Columbia.
If the strike happens, it could see containers pile up in “critical” west coast ports and drive prices higher for consumers throughout Canada.
Roughly 7,400 terminal cargo loaders working at B.C. ports are currently set to walk off the job at 8 a.m. Pacific on July 1. That’s after the International Longshore and Warehouse Union Canada (ILWU) issued a 72-hour strike notice to the British Columbia Maritime Employers Association (BCMEA) on Wednesday morning.
The union is seeking better compensation to offset the impacts of high inflation on workers and deliver more job security in the face of work being contracted out, in addition to automation at ports.
More than 30 B.C. ports and 49 employers on the waterfront would be disrupted by a work stoppage.
Ports in Vancouver and Prince Rupert are “pivotal” for Canadian trade, says UBC Sauder School of Business professor Werner Antweiler.
Some $800 million worth of goods flow into and out of Canada through B.C.’s ports every day, he says, representing roughly a quarter of the country’s total imports and exports.
“These ports are critical infrastructure. They are a bottleneck for our economy that we all rely on,” he tells Global News. “If they go offline for any number of days, it will lead to costs in the hundreds of millions of dollars.”
A work stoppage of even a few days could be significant, but the “longer a strike lasts, the more profound the effects” will be, Antweiler says.
Businesses that rely on intermediate goods shipped in from Asia, for example, will be unable to carry on their operations. They’ll have to source goods from other suppliers or reroute existing shipments through ports in the United States, both of which will add costs to their bottom lines, Antweiler says.
Supply chain disruptions tied to the COVID-19 pandemic recovery were a significant cause of the ongoing bout of inflation — another significant disruption could see consumers face additional delays or pay higher prices as a result, he adds.
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“It cannot go on for long without doing major damage to the economy,” Antweiler says.
Who would the strike impact most?
Businesses in manufacturing such as the auto sector and retail are likely to see the biggest impacts because of their reliance on imports, Antweiler says. He notes other industries such as trucking and warehousing could also be hit by a delay.
Some workers in these sectors could face layoffs if there’s no work as a result of the stoppage, Antweiler says.
Because of the widespread knock-on impacts from a possible strike, parties on both sides of the table will be under “enormous pressure” to come to a deal and avert a prolonged disruption, he says.
The Canadian Chamber of Commerce said in a statement Thursday it is “deeply disturbed” the British Columbia port workers’ union has served strike notice and is prepared to walk out on Saturday.
The business association’s statement urges the federal government to “use all the tools in its toolbox” to prevent a strike.
This comes after federal ministers and B.C. Premier David Eby publicly urged the province’s port workers and employers to find a way to avert job action.
In a joint statement issued Wednesday, Labour Minister Seamus O’Regan and Transport Minister Omar Alghabra said they support the collective bargaining process and that reaching a deal remains the focus.
“We strongly encourage the parties to get back to the bargaining table and work together to reach an agreement. That is what matters most right now,” it read.
“Everyone — the employer, the union, the mediators and the government — understands the urgency and what is at stake for Canadians and our supply chains. The parties are responsible for moving goods both nationally and internationally, and industries and consumers would feel the effects of a work stoppage,” the statement reads.
Antweiler believes that, if a strike were to occur, federal and provincial governments would not let the action go more than two weeks before stepping in directly with possible legislation.
The volume of trade passing through B.C. ports means every day that goods aren’t flowing matters significantly to Canadians’ supply chains, he adds.
Some 3.5 million containers pass through B.C. ports annually, working out to thousands per day, according to Antweiler. Every day that goes by more and more containers would be piling up and waiting to be unloaded — a backlog that would take many more days to relieve and return to normal operations after even a brief stoppage had passed.
Similar concerns were raised last year about the economic impact of blockades in Coutts, Alta., and at the Ambassador Bridge connecting Windsor, Ont., and Detroit, Mich., the latter of which facilitates some $400 million worth of trade between Canada and the U.S. on a daily basis. The federal government cited “threats to (Canada’s) economic security” in invoking the Emergencies Act to clear the blockades and protests tied to the so-called Freedom Convoy in Ottawa.
Despite initial impacts on businesses in the affected provinces, data from Statistics Canada shows that overall cross-border trade volumes in Ontario and Alberta grew year-over-year in February 2022 when the blockades were active. Businesses who spoke to Global News said they were forced to adapt to the closures by rerouting shipments around the shuttered border crossings.
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