Labour strife exposes Canada’s chokepoint economy
As published by The Hub
Canada is a big-country paradox.
Despite having the world’s second-largest land mass, our economy is undermined by a handful of critical supply chain chokepoints, where inadequate infrastructure or labour disputes can paralyze trade.
We lack the transport capacity and economic infrastructure to get many products to overseas markets quickly, or even to move goods reliably from east to west within Canada. That shortfall has become nothing short of a national economic emergency, and sits at the heart of the Carney government’s agenda, including the “major projects” fast-tracking legislation, Bill C-5.
At the same time, there are other non-infrastructure barriers that can amplify those chokepoints, exacerbating the problem.
The latest example is the strike by more than 10,000 flight attendants at Air Canada, grounding tens of thousands of passengers and causing immediate headaches for small, medium and large businesses facing shortages of cargo capacity on both domestic and international freight routes.
Of course, labour problems at critical economic nodes are not new.
A year ago, Canada’s rail freight system also ground to a halt because of labour deadlock. In 2023, a 13-day strike at British Columbia ports froze operations at dozens of terminals and disrupted more than $10 billion in international trade.
There have long been calls for changes to the labour code to address stoppages at crucial transportation hub chokepoints. But what these disputes highlight more than anything is the need to think holistically about supply-chain resilience. As the Business Council of Canada’s recent report Selling to Our Strengths points out, labour uncertainty and lack of infrastructure are symbiotic challenges that together hinder Canada’s ability to get goods to global markets.
One idea circulating in Ottawa deserves particular attention: a single act that would tackle all the pieces together. A supply chain/critical infrastructure law could give government more targeted tools to defuse labour disputes, broaden infrastructure fast lane provisions, and help solve other operational issues at critical economic nodes across the country. After all, a supply chain is a complex network of companies, workers, regulators, public and private assets, as well as capital. A coherent approach makes far more sense than a patchwork of laws and directives.
By addressing the challenges together, the government can send a clear signal to investors and the public that it’s serious about addressing the problem. More importantly, such a “chokepoint” act could enshrine into Canadian jurisprudence the concept of “economically critical infrastructure,” or ECI, providing a new statutory framework and single governance architecture for policymakers.
For example, such a law could give the government more tools to resolve labour disputes at so-called ECIs before they metastasize. This could include giving mediators more authority during bargaining, or allowing for some type of “timeout” provision that temporarily prevents strikes during negotiations. But the same act could also expand the federal government’s expedited-project regime to include chokepoints, ensuring capacity is built to reduce our vulnerability to disruptions in the future.
Currently, that regime under C-5 is not only limited to major projects but is also time-bound by a five-year sunset clause. A new supply chain law could provide a path to permanency for these fast-track provisions.
In addition to addressing labour issues and infrastructure, a single critical infrastructure act could also address operational challenges: accelerating customs clearance; establishing protocols and information-sharing between parts of the chain to facilitate rerouting in case of disruption; stronger penalties for illegal blockades of key corridors; and other emerging regulatory needs around things like cyberattacks.
Much of the groundwork has already been done, including a 2022 study by the House of Commons transport committee, a task force set up that same year by the Trudeau government, as well as a recently released federal report into the labour disputes at Canada’s West Coast ports. Earlier this year, the government had also created a Supply Chain Advisory Council to provide strategic advice on these issues.
This is, politically, a controversial pitch. Legislation that touches on the right to strike needs to be defensible in court. A narrowly framed law focused on critical infrastructure and its ability to serve Canada’s national and economic interests could prove more legally robust.
Either way, whether through a single act or multiple coordinated tracks, it’s clear that the current ad hoc approach to dealing with disruptions to essential infrastructure is no longer sufficient. If Ottawa wants to stop firefighting supply chains and start building durable ones, it needs to think more clearly about the fundamental problem it’s trying to solve: creating a modern, trade-capable economy that benefits all Canadians.
