The B.C. port strike, which entered its fourth day on Tuesday, is already having ripple effects across the economy, with trucking companies grounded and fears that consumer prices will soar as supplies dwindle.
Economy
B.C. port workers strike will have ripple effects across the economy
Groups representing Canadian businesses want the federal government to intervene in the strike
More than 7,400 members of the International Longshore and Warehouse Union Canada, who load and unload cargo at more than 30 B.C. ports, have been on strike since Saturday. Talks between the union and the B.C. Maritime Employers Association have stalled.
Ports in Metro Vancouver and Prince Rupert are “critical infrastructure” that handle a quarter of Canada’s international trade, said UBC Sauder School of Business prof. Werner Antweiler.
Businesses that rely on products shipped from Asia, for example, will quickly run out of inventory, forcing them to reroute products from ports in Seattle or other suppliers, Antweiler said. That will make the product more expensive and the cost will be passed to the consumer, he said.
Sandhar said someone recently asked him what is in the shipping containers.
His reply: “Everything. Wherever you’re sitting right now, look around you. Your sofas are in the containers, the tables are in there, your rugs are in there. Your produce is in there. Your seafood, and all types of food and beverages, electronics appliances,” he said. “It’s a huge impact and some people don’t fully recognize how much of an impact (the strike) has on raising the cost of these goods.”
Groups representing Canadian businesses want the federal government to intervene in the strike, with one organization calling for legal changes that would discourage future disruptions.
Canadian Manufacturers and Exporters says designating ports and rail lines as essential infrastructure, and limiting when and where labour and other disruptions can occur, would provide manufacturers the stability they need.
The group, which says its members account for about 82 per cent of total manufacturing production and 90 per cent of Canada’s exports, estimates that $500 million worth of goods is being disrupted every day.
In 2021, the federal government passed back-to-work legislation that forced the Port of Montreal’s 1,150 dock workers to end their strike at one of Canada’s busiest ports.
Bridgitte Anderson, president and CEO of the Greater Vancouver Board of Trade, said in a statement “a labour disruption at west coast ports will fuel inflation and damage already-fragile supply chains that were impacted by the COVID-19 pandemic, heat domes, and catastrophic flooding in recent years.”
B.C. ports move $800 million worth of cargo every day, Anderson said, and those goods are vital for manufacturing, retail, agriculture, automotive, and energy industries across Canada.
Anderson urged the federal government to work with the union and employers “to reach a fair and expedient resolution to ensure Canadians have access to essential goods and protect Canada’s reputation as a reliable trading partner.”
The Mining Association of Canada on Tuesday expressed “serious concern” about the “damaging effects” the port strike could have on the mining industry and the broader Canadian economy.
The mining sector is a major user of Canada’s ports and is the largest single shipping sector by volume by both rail and marine modes, according to the association. The majority of the mining products are shipped to international customers, accounting for 22 per cent — or $127 billion — of the total value of Canada’s exports in 2021.
Representatives for the B.C. Maritime Employers Association and the International Longshore and Warehouse Union Canada negotiated over the long weekend, before the association issued a statement saying it didn’t think more bargaining would produce a deal.
The association said Tuesday that negotiations were “paused, pending further discussion with the federal mediators.”
The union has meanwhile accused the association of changing its position on a key issue at the last minute to “muddy the waters.”
Federal Labour Minister Seamus O’Regan said in a tweet that federal mediators “continue to support” both sides in the negotiations.
“We encourage both parties to immediately return to the bargaining table and remain there until a deal is reached,” he said. “Collective bargaining is hard work, but it’s how the best, most resilient deals are made.”
— with files from Canadian Press
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TORONTO – Canada’s main stock index was higher in late-morning trading, helped by strength in energy stocks, while U.S. stock markets also moved up.
The S&P/TSX composite index was up 34.91 points at 23,736.98.
In New York, the Dow Jones industrial average was up 178.05 points at 41,800.13. The S&P 500 index was up 28.38 points at 5,661.47, while the Nasdaq composite was up 133.17 points at 17,725.30.
The Canadian dollar traded for 73.56 cents US compared with 73.57 cents US on Monday.
The November crude oil contract was up 68 cents at US$69.70 per barrel and the October natural gas contract was up three cents at US$2.40 per mmBTU.
The December gold contract was down US$7.80 at US$2,601.10 an ounce and the December copper contract was up a penny at US$4.28 a pound.
This report by The Canadian Press was first published Sept. 17, 2024.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
The Canadian Press. All rights reserved.
OTTAWA – Canada’s inflation rate fell to two per cent last month, finally hitting the Bank of Canada’s target after a tumultuous battle with skyrocketing price growth.
The annual inflation rate fell from 2.5 per cent in July to reach the lowest level since February 2021.
Statistics Canada’s consumer price index report on Tuesday attributed the slowdown in part to lower gasoline prices.
Clothing and footwear prices also decreased on a month-over-month basis, marking the first decline in the month of August since 1971 as retailers offered larger discounts to entice shoppers amid slowing demand.
The Bank of Canada’s preferred core measures of inflation, which strip out volatility in prices, also edged down in August.
The marked slowdown in price growth last month was steeper than the 2.1 per cent annual increase forecasters were expecting ahead of Tuesday’s release and will likely spark speculation of a larger interest rate cut next month from the Bank of Canada.
“Inflation remains unthreatening and the Bank of Canada should now focus on trying to stimulate the economy and halting the upward climb in the unemployment rate,” wrote CIBC senior economist Andrew Grantham.
Benjamin Reitzes, managing director of Canadian rates and macro strategist at BMO, said Tuesday’s figures “tilt the scales” slightly in favour of more aggressive cuts, though he noted the Bank of Canada will have one more inflation reading before its October rate announcement.
“If we get another big downside surprise, calls for a 50 basis-point cut will only grow louder,” wrote Reitzes in a client note.
The central bank began rapidly hiking interest rates in March 2022 in response to runaway inflation, which peaked at a whopping 8.1 per cent that summer.
The central bank increased its key lending rate to five per cent and held it at that level until June 2024, when it delivered its first rate cut in four years.
A combination of recovered global supply chains and high interest rates have helped cool price growth in Canada and around the world.
Bank of Canada governor Tiff Macklem recently signalled that the central bank is ready to increase the size of its interest rate cuts, if inflation or the economy slow by more than expected.
Its key lending rate currently stands at 4.25 per cent.
CIBC is forecasting the central bank will cut its key rate by two percentage points between now and the middle of next year.
The U.S. Federal Reserve is also expected on Wednesday to deliver its first interest rate cut in four years.
This report by The Canadian Press was first published Sept. 17, 2024.
The Canadian Press. All rights reserved.
FREDERICTON – New Brunswick‘s finance minister says the province recorded a surplus of $500.8 million for the fiscal year that ended in March.
Ernie Steeves says the amount — more than 10 times higher than the province’s original $40.3-million budget projection for the 2023-24 fiscal year — was largely the result of a strong economy and population growth.
The report of a big surplus comes as the province prepares for an election campaign, which will officially start on Thursday and end with a vote on Oct. 21.
Steeves says growth of the surplus was fed by revenue from the Harmonized Sales Tax and federal money, especially for health-care funding.
Progressive Conservative Premier Blaine Higgs has promised to reduce the HST by two percentage points to 13 per cent if the party is elected to govern next month.
Meanwhile, the province’s net debt, according to the audited consolidated financial statements, has dropped from $12.3 billion in 2022-23 to $11.8 billion in the most recent fiscal year.
Liberal critic René Legacy says having a stronger balance sheet does not eliminate issues in health care, housing and education.
This report by The Canadian Press was first published Sept. 16, 2024.
The Canadian Press. All rights reserved.
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