Labour disruptions threaten Canadian economy, Raitt tells Senate

‘We have to recognize that every link in the supply chain, from that shortline railway in Saskatchewan to the container terminal in Prince Rupert, contributes to our competitiveness, and each one deserves predictability, clarity and a modern regulatory framework,’ says Lisa Raitt.

Labour disruptions in transportation sectors threaten to shock the Canadian economy, and the country’s reputation as a trading partner, if the current regulatory framework remains in place, according to former federal Transport minister Lisa Raitt. 

“The sectors that move our goods not only feed our families, heat our homes, supply our hospitals, support our agriculture, fuel our industries but they also bring people together — they also move these critical goods to partners around the world,” said Raitt, Vice-Chair of Global Investment Banking at CIBC and Co-Chair of the Coalition for a Better Future, who appeared before the Senate’s Transport and Communications committee in late November to testify on the maintenance of transport services in the case of labour disruptions.

“If we are serious about building an economy that is pan-Canadian in nature — competitive, connected and resilient — then we really need to modernize how we think about essential services and transportation.” 

Canada’s economy needs to be built upon modern infrastructure, a resilient supply chain and a regulatory system calibrated for the “economy of the future,” according to Raitt, who offered considerations for the committee: discuss widening the definition of “essential services” to consider those on which Canada’s economic security depends; require preemptive continuity plans for critical economic corridor; and develop structured, time-bound dispute resolution tools. 

Raitt warned senators that labour disruptions in rail and marine sectors are no longer isolated industrial disputes, but systematic risks which reverberate across the economy, particularly in regions that depend on a single transportation corridor for market access. 

“We have to recognize that every link in the supply chain, from that shortline railway in Saskatchewan to the container terminal in Prince Rupert, contributes to our competitiveness, and each one deserves predictability, clarity and a modern regulatory framework," she said. Disruptions in one part of the network, she said, can cascade into national economic harm.

Establishing strong frameworks for labour stability would help create more opportunities for companies such as ports, who currently may lose business due to the impending possibilities of a strike. 

“It is very difficult, senator, for a company to understand or to think that in approximately 15 months, we may be faced with another work stoppage in the B.C. port system,” she said. “That does cause some decision-making to put us in a situation where we are now, where the U.S. ports become very attractive.” 

A recent decision by Nutrien, a major Canadian potash company, points to an example of such fallout — they opted to ship their product out of a U.S. port rather than a Canadian one. Raitt suggested that in the U.S., “all bets are off” when it comes to enabling economic growth. 

“They will use every tool that they possibly can in order to attract that kind of group to the system, because it creates jobs and gives it a great opportunity,” she said. 

In weighing their options, Raitt is “sure” the company considered labour stability, and the flexibility of various ports.  Canadian ports, unfortunately, are restricted in their ability to attract opportunities because of the ways in which they are governed. 

“We are competing with them not just on the basis of cost, but we are competing with them on the basis of how credible we are in terms of being able to sustain a service to,” she explained. 

Additionally, companies can suffer due to impatient shareholders, or frustrated customers, she said later. 

To establish better labour stability, Raitt suggested that unions and companies need more structured tools, and access to mediation. Additionally, ministers should not be inserted too early into the process, as they have one tool, the back-to-work legislation, which is blunt and limited in its capacities. 

While Raitt suggested that the committee consider the possibility of classifying transport sectors as essential services, making them unable to strike, she warned that it would have to be done in constructive collaboration with unions from across the country. Otherwise, it will end up causing “wildcat strikes” and annoying important shareholders. 

“We are trying to diversify and pivot, and you can’t do that if your supply chain is not reliable,” she said.

Ultimately, Raitt suggested the ongoing adversarial nature is the biggest threat for supply chain reliability. 

“If you build a case for a common goal of economic prosperity … maybe that is the path forward,” she said.