Canada’s West Coast Port Strike Seen Putting Country’s Reputation at Risk

By Curtis Heinzl (Bloomberg) —

A strike by dockworkers on Canada’s west coast stretched into a fifth day, causing business groups to warn of a growing risk to the country’s economy and reputation.

An extended strike will primarily hurt Canada’s exports of steelmaking coal, copper concentrates and potash, Mining Association of Canada President Pierre Gratton said.

The bulk of Canada’s steelmaking coal is produced in British Columbia, mostly by Teck Resources Ltd., and shipped through Vancouver to countries including Japan and Korea, Gratton said. Teck said it can divert shipments through other terminals to mitigate the impact of the strikes, but Gratton said a disruption longer than a week would have “severe” consequences for Canada’s economy.

“Our reputation as a trading country that can be relied upon is at stake,” said Matthew Holmes, a senior vice president of the Canadian Chamber of Commerce. The chamber wants Parliament, which began its summer recess last month, to return and pass legislation bring the workers back, Holmes said.

Labor Minister Seamus O’Regan said federal mediators were still at work, and the government wants to see a negotiated deal. 

Federal mediators continue to support BCMEA and ILWU in their negotiations.

We encourage both parties to immediately return to the bargaining table and remain there until a deal is reached.

Collective bargaining is hard work but it's how the best, most resilient deals are made.

— Seamus O'Regan Jr (@SeamusORegan) July 4, 2023

About C$800 million ($605 million) of goods — a quarter of Canada’s imports and exports — pass through the affected ports each day. A strike means most of these goods must either wait in the port or be re-routed through the US.

Grain shipments have continued amid the strike as required by the Canada Labour Code.

A slowdown in exports could affect global supply chains, Fertilizer Canada Chief Executive Officer Karen Proud said. Canada is the world’s largest producer of potash — a group of potassium compounds used in fertilizer. The war in Ukraine has already complicated fertilizer availability from Russia and Belarus — which also are major producers — and a reduction in Canadian exports would further strain the supply, Proud said.

Canadian import and export infrastructure has been obstructed several times in the last few years, including during a railway strike in 2019, the blockage of a major trucking bridge in 2022 and interference by public-service workers at the Port of Montreal earlier this year.

“If these events continue to occur, it makes people think twice whether Canada is the place to move your product from,” said Brian Kingston, CEO of the Canadian Vehicle Manufacturers’ Association.

–With assistance from Jacob Lorinc.

© 2023 Bloomberg L.P.

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