Fears over supply-chain disruption grow as B.C. port strike talks remain deadlocked

Consumers and smaller companies will feel the impact of the port workers' strike in British Columbia, business groups warn, as the docks that handle a hefty chunk of Canada's traded goods remain shut down.

Industry organizations say the job action by 7,400 waterfront employees that began Saturday will back up shipments, deplete inventories and boost prices on goods in shorter supply.

Dock workers walked off the job before negotiations over wages, automation and contracting out hit a deadlock at ports that handle 16 per cent of the country's total traded goods.

Small and medium-sized businesses will be hurt most, since they have fewer resources and less leverage to lean on, said Dennis Darby, who heads the Canadian Manufacturers and Exporters trade group.

"Companies don't run huge inventories, as we learned during the pandemic,'' Darby said, adding some will be able to hold out for just a few days.

"They may have contracts with their customers and they don't have the ability to pass on [cost] increases,'' he added. But for those that can, "it just adds to the potential inflationary effect.''

While entire contracts may be at risk if products are not delivered on time, undelivered perishable goods could also mean retailers lose out on sales and "considerable revenue,'' said Jasmin Guenette, vice-president of the Canadian Federation of Independent Business.

Bob Ballantyne, senior adviser and past president at the Freight Management Association of Canada, said consumers could eventually see higher prices in sectors ranging from clothing to cars.

"The fact that so much in the way of retail goods come from [East Asia] these days — from China and Vietnam and Korea — means that retailers, and obviously then consumers, will be impacted by this in a big way,'' Ballantyne said.

"The pinch will be felt very broadly across the entire Canadian economy.''

The flow of auto parts and building materials into Canada will also slow, snarling already clogged supply chains, he said. "People have been waiting for vehicles, and this is going to make that situation even worse in the short to medium term.''

Meanwhile, exporters may soon face a storage crisis as well as potential temporary closures.

"If it's industries with a continuous process like some chemical industries, shutting down those operations is a big deal and costs a lot of money,'' Ballantyne said.

Companies that churn out commodities such as lumber, fertilizer and sulphur are all contending with a halt on overseas shipments out of West Coast ports.

Grain products continue to flow abroad, in line with rules under the Canada Labour Code.

Maintenance jurisdiction

The International Longshore and Warehouse Union Canada said its jurisdiction over maintenance is being eroded by the use of contractors. The employers' refusal to agree to "one sentence'' of a maintenance document marks a key sticking point, it said.

The B.C. Maritime Employers Association said Tuesday the union is trying to "aggressively expand'' its control of maintenance duties far beyond an agreement that the association argued has been "legally well established for decades.''

Business organizations as well as officials in Alberta and Saskatchewan have called on Ottawa to step in and end the strike, but federal Labour Minister Seamus O'Regan has said he wants the union and employers to go back to the negotiating table after they hit an impasse this week.