Emergencies Act helps reputation
Border access important for both sides
Many have watched in disbelief as protesters easily blocked access points between the United States and Canada.
For six painful days, this included the Ambassador Bridge, a key trade conduit between the two countries, forcing trucks to be rerouted.
Other crossings were disrupted in Manitoba and Alberta. Many shipments were delayed, and some perishable cargo had to be scrapped — more waste and more cost to industry and consumers.
The Trudeau government is invoking the Emergencies Act. Given how far things have gone, they had to consider all options.
Disrupting urban centres can be troubling for citizens, but the risks are significantly different when trade between two countries stops. If supply chains are the backbone of our economy, the border is its spinal cord.
Manufacturing plants were closing, and it took barely a few hours before the White House made a call to the prime minister to share its concerns. Our food supply chain is messy these days, and the last thing it needed was more logistical predicaments created by the convoy.
If some didn’t know the border between Canada and the United States was the focus for both economies over the years, now they do. Keeping the longest border in the world open, peaceful and disruption-free is no easy feat. It has taken decades to foster a spirit of interdependence between the two countries, especially for the agrifood sector. In the last year, Canada was the second-largest export market for U.S. agricultural exports, totalling more than $26 billion and accounting for 15 per cent of total U.S. agricultural exports.
At the same time, the United States imported more than $30 billion worth of agricultural products from Canada. That border is busy; without it, the food security landscape in Canada would look quite different.
Economically, the impact of blockades will be inconsequential. Companies have a way of dealing with anything we throw at them, especially in food distribution. Empty shelves are bad for business, and importers and exporters will do anything not to see us leave grocery stores emptyhanded.
The damage, though, is beyond numbers. What may be affected by blockades is reputation and trust. To be summoned, in a way, by Washington was nothing short of embarrassing.
As the smaller and less economically influential of the two countries, Canada has a lot more to lose. America, logistically, has more options.
Blocking a border will have potentially long-term consequences. This may persuade the United States to reconsider strategic alternatives or change its stance on certain sensitive trade issues, like softwood lumber and dairy. Canada may just have made a stronger case for America First advocates.
But consumers will be hurt the most. It is too soon to know how food affordability will be affected by the blockades. But with many shipments destroyed or delayed, and adding increasing pressures related to fuel costs, we are expecting some food prices to potentially rise beyond what was predicted just a few months ago.
Canadians are facing enough financial pressures. This added a layer that is simply not necessary.
Logistically, the concept of driverless vehicles using autonomous technology for large-scale highway freight transport has merit more than ever perhaps. Some companies have had to cut production due to procurement issues caused by blockades. It has made some operations think differently about transportation across North America, and getting rid of humans behind the wheel may be an option with more appeal.
In the end, though, blockades happened for a reason. But for our trading partner, it doesn’t matter what that is.
Some damage was done. For the food supply chain, there's nothing more disruptive than civil unrest. Reputation and trust are damaged, permanently in some cases. Ottawa has serious diplomatic issues to address, so invoking the Emergencies Act is also about Canada’s reputation abroad.