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 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,” the coalition said, which represents automotives, 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. National Chief Perry Bellegarde said governments and industry need to give the time and space to work with the Wet’suwet’en.
The blockades undermine Canada’s reputation as a dependable partner in international trade
industry letter to Prime Minister Justin Trudeau
“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 has forced Via Rail and Canadian National to halt its 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.
Many businesses 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 Co. and Canadian Pacific Railway Co.
“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.
Maple Leaf Foods is trying to get its perishable products shipped out in time.
Peter J. Thompson/National Post files
“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 in some way, 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 in an interview 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.
It hurts, because it suggests you can’t get anything done in Canada
Steve Laut
“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 the Canadian economy 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, with an expected reversal in the second quarter.
Supporters of the Wet’suwet’en Nation take a break during occupation of railway tracks, as part of a protest against British Columbia’s Coastal GasLink pipeline, in Toronto, on Feb. 15.
Chris Helgren/Reuters
However, with large disruptions such as strikes, the manufacturing industry usually experiences a “significant” bounce back. “You’re delaying activity but not losing it altogether in a lot of cases,” he said.
“You build up inventory for a while and eventually a lot of that production is going to be backloaded. You lose production in the near term but maybe then you add shifts temporarily to make up for lost production when you regain transportation capacity.”
CME’s Darby hopes that the government can reverse the declines in Canada’s industrial economy. “I hope very strongly that the government will be able to come up with a long-term solution. It’s not about necessarily just solving this issue today about this particular blockade. It’s about how to give manufacturers, or any industry, predictability.”
The right to protest is “part of the Canadian history,” but the government must step in because the protests are “hurting our economy,” he said.
TORONTO – Roots Corp. may have built its brand on all things comfy and cosy, but its CEO says activewear is now “really becoming a core part” of the brand.
The category, which at Roots spans leggings, tracksuits, sports bras and bike shorts, has seen such sustained double-digit growth that Meghan Roach plans to make it a key part of the business’ future.
“It’s an area … you will see us continue to expand upon,” she told analysts on a Friday call.
The Toronto-based retailer’s push into activewear has taken shape over many years and included several turns as the official designer and supplier of Team Canada’s Olympic uniform.
But consumers have had plenty of choice when it comes to workout gear and other apparel suited to their sporting needs. On top of the slew of athletic brands like Nike and Adidas, shoppers have also gravitated toward Lululemon Athletica Inc., Alo and Vuori, ramping up competition in the activewear category.
Roach feels Roots’ toehold in the category stems from the fit, feel and following its merchandise has cultivated.
“Our product really resonates with (shoppers) because you can wear it through multiple different use cases and occasions,” she said.
“We’ve been seeing customers come back again and again for some of these core products in our activewear collection.”
Her remarks came the same day as Roots revealed it lost $5.2 million in its latest quarter compared with a loss of $5.3 million in the same quarter last year.
The company said the second-quarter loss amounted to 13 cents per diluted share for the quarter ended Aug. 3, the same as a year earlier.
In presenting the results, Roach reminded analysts that the first half of the year is usually “seasonally small,” representing just 30 per cent of the company’s annual sales.
Sales for the second quarter totalled $47.7 million, down from $49.4 million in the same quarter last year.
The move lower came as direct-to-consumer sales amounted to $36.4 million, down from $37.1 million a year earlier, as comparable sales edged down 0.2 per cent.
The numbers reflect the fact that Roots continued to grapple with inventory challenges in the company’s Cooper fleece line that first cropped up in its previous quarter.
Roots recently began to use artificial intelligence to assist with daily inventory replenishments and said more tools helping with allocation will go live in the next quarter.
Beyond that time period, the company intends to keep exploring AI and renovate more of its stores.
It will also re-evaluate its design ranks.
Roots announced Friday that chief product officer Karuna Scheinfeld has stepped down.
Rather than fill the role, the company plans to hire senior level design talent with international experience in the outdoor and activewear sectors who will take on tasks previously done by the chief product officer.
This report by The Canadian Press was first published Sept. 13, 2024.
VANCOUVER – Mediated talks between the union representing HandyDART workers in Metro Vancouver and its employer, Transdev, are set to resume today as a strike that has stopped most services drags into a second week.
No timeline has been set for the length of the negotiations, but Joe McCann, president of the Amalgamated Transit Union Local 1724, says they are willing to stay there as long as it takes, even if talks drag on all night.
About 600 employees of the door-to-door transit service for people unable to navigate the conventional transit system have been on strike since last Tuesday, pausing service for all but essential medical trips.
Hundreds of drivers rallied outside TransLink’s head office earlier this week, calling for the transportation provider to intervene in the dispute with Transdev, which was contracted to oversee HandyDART service.
Transdev said earlier this week that it will provide a reply to the union’s latest proposal on Thursday.
A statement from the company said it “strongly believes” that their employees deserve fair wages, and that a fair contract “must balance the needs of their employees, clients and taxpayers.”
This report by The Canadian Press was first published Sept. 12, 2024.
MONTREAL – Travel company Transat AT Inc. reported a loss in its latest quarter compared with a profit a year earlier as its revenue edged lower.
The parent company of Air Transat says it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31.
The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.
Revenue in what was the company’s third quarter totalled $736.2 million, down from $746.3 million in the same quarter last year.
On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.
Transat chief executive Annick Guérard says demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty.
This report by The Canadian Press was first published Sept. 12, 2024.
