BLOCKADE TENSIONS
A protest near Belleville, Ont., on Tuesday supports Wet’suwet’en hereditary chiefs opposed to the LNG pipeline in B.C. Industry is calling for an end to blockades.
Businesses are warning of looming layoffs, lost revenue and a hit to Canada’s reputation, as rail disruptions drag on in the country.
A coalition of 39 industry associations wrote a letter to Prime Minister Justin Trudeau on Tuesday, calling on him to “work urgently” with First Nations and on police to bring the blockade to a peaceful end.
“The damage inflicted on the Canadian economy and on the welfare of all our citizens mounts with each hour that these illegal disruptions are allowed to continue,” said the coalition, which represents automotive, mining and numerous other industries.
While the members said they share the government’s commitment to reconciliation with Indigenous groups, the blockades “inflict serious damage on the economy, leaving countless middle-class jobs at risk, many of them in industries that must get their goods, parts, and ingredients to and from market by rail.”
“In addition to disrupting domestic and global supply chains, the blockades undermine Canada’s reputation as a dependable partner in international trade,” they said in the letter.
The rail blockades sprung up on Feb. 6 as Indigenous groups and activists across the country protested in solidarity with the hereditary Wet’suwet’en chiefs that are opposed the Coastal Gaslink project in British Columbia. The hereditary chiefs oppose the pipeline through their traditional territory, though it’s received approval from elected band councils.
Meanwhile, the national chief of the Assembly of First Nations called for calm and constructive dialogue to ease tensions. Perry Bellegarde said governments and industry need to give the time and space to work with the Wet’suwet’en.
“We say we want to de-escalate and we want dialogue,” he said. “And I say our people are taking action because they want to see action — and when they see positive action by the key players, when they see a commitment to real dialogue to address this difficult situation, people will respond in a positive way.”
The rail stoppages have forced Via Rail and Canadian National to halt operations for more than a week, bringing a key artery of Canadian transportation infrastructure to a halt. On Tuesday, Via Rail said it’s preparing to resume part of its passenger rail service.
THE DAMAGE INFLICTED ON THE CANADIAN ECONOMY ... MOUNTS WITH EACH HOUR.
Many business executives are already counting the cost of the rail paralysis.
Dennis Darby, CEO of Canadian Manufacturers and Exporters, estimates around $425 million of manufactured goods is sitting idle as shipments are stalled, based on Statistics Canada numbers and rail usage estimates from Canadian National Railway and Canadian Pacific Railway.
“We’ve talked to a number of members here in Ontario and many of them said if (the blockades) extend into that two-week range, most companies will have to start temporary layoffs and cutting shifts, because we just don’t have the inventory,” Darby said during a press conference in Toronto on Tuesday.
Mississauga, Ont.-based Maple Leaf Foods Inc. is also facing escalating costs as it tries to get its perishable products shipped out in time, according to its president Curtis Frank.
“While it is true that we have already begun to move loads by truck wherever we can, the fact of the matter is that road transportation is becoming harder and harder to secure every day,” he said at the press conference. Just under a third of Maple Leaf ’s revenue is dependent on the movement of perishable products through the rail network, Frank said.
Other industry executives underscored the need to get infrastructure projects built in the country.
“It hurts, because it suggests you can’t get anything done in Canada,” Steve Laut, executive vice-chairman of Canadian Natural Resources Ltd., told the National Post Tuesday. “And it’s hurting investment across the board.”
“It’s about the pipelines, but it’s also not about the pipelines — it’s about a number of other issues that Canadians have not addressed for a long time.”
Agriculture industry groups have also warned that recent blockades would deepen the financial pain felt by farmers after a dismal harvesting season.
“These new blockades are once again hampering the ability for farmers to get their products to port, especially those in Western Canada,” the Canadian Federation of Agriculture said in a written statement Tuesday.
The protests could put additional pressure on the Canadian economy at a time when it remains vulnerable after narrowly avoiding a contraction in the fourth quarter of 2019.
Finance Minister Bill Morneau, who is preparing to release the federal budget in coming weeks, has already warned that the spread of the coronavirus could weaken economic output. Slumping Canadian manufacturing sales in December could add to those woes, while blockades threaten to further depress business investment.
“We see that the blockade does have real economic impacts,” Morneau told reporters on Tuesday.
Nathan Janzen, senior economist at RBC Economics, said that the blockades may result in a two or three tenths of a per cent drop in the first quarter GDP.