Locked out workers were picketing in front of the International Longshorman’s Association’s office in Montreal on Monday. Workers were locked out after rejecting a contract with their employer on Sunday, setting off another work stoppage as a simultaneous lockout at British Columbia ports drags on.Andrej Ivanov/The Globe and Mail
Employer lockouts at Canada’s two biggest ports have halted much of the country’s global trade, putting pressure on the federal government to take steps that will limit economic damage.
The Port of Montreal’s 1,200 longshore workers were locked out on Sunday night after employees rejected a new contract with their employers’ group. Ship and dock foremen at British Columbia’s ports, including Vancouver, have been locked out since Nov. 4 as employers push them to approve a new collective agreement.
Business groups say the lockouts have stopped the shipping of goods worth about $1.2-billion a day and will lead to cascading layoffs and financial losses as the shutdowns persist.
About 1,200 Montreal dock workers represented by the Canadian Union of Public Employees on Sunday overwhelmingly rejected an offer from the Maritime Employers Association. The workers are seeking raises of 20 per cent over four years – deals that match those approved by their counterparts in Vancouver and Halifax. The employers had offered cumulative increases of 20 per cent over six years.
“The hostile offer was rejected because the employer refused to negotiate,” said Michel Murray, a CUPE spokesman. “Nothing in the offer reflects the union’s demands.”
The employers group said it “deplores” the outcome and reiterated its call for Minister of Labour Steven MacKinnon to intervene.
Mr. MacKinnon on Monday showed no sign he was set to do so. “The parties must understand the urgency of the situation and do the work necessary to reach an agreement,” said Matthieu Perrotin, a spokesman for Mr. MacKinnon, in an e-mail. “Canadians are counting on them.”
The Trudeau government has been reluctant in the past to force an end to labour disputes, preferring to put its faith in the collective bargaining process. Last month, the minister tried to reset faltering talks between the two sides in Montreal by proposing to appoint a special mediator and bar work stoppages for 90 days but that was rejected by the parties.
Some business groups are calling for Ottawa to issue a directive to the Canadian Industrial Relations Board to impose binding arbitration and ensure that port operations resume, which is what the government did in ending lockouts at Canada’s two railways this past summer. The other option the government has is to pass back-to-work legislation in Parliament, which would also put the final resolution in the hands of an arbitrator. There are risks in both approaches, both politically and legally.
Montreal Port Authority chief executive officer Julie Gascon predicted the effects of a continuing dispute will be “catastrophic.”
“Today, the conflict is hitting the supply chain. Tomorrow, it will hit the factories,” she told reporters on Monday. “After that, the retailers. It will hit the entire economy of Eastern Canada.”
Ms. Gascon said in addition to the 1,200 dock workers who’ve been locked out by their employer, the work stoppage affects another 10,000 workers who depend directly on the activities of the Port of Montreal such as truckers and railway personnel. It’s a question of days before all citizens begin to feel the fallout, she said.
Amid the labour uncertainty, some shipping lines have for weeks been turning away their vessels from Montreal and redirecting them to New York, Norfolk, Va., and Savannah, Ga., Ms. Gascon said. She said while some U.S. ports are seeing gains in container traffic, Montreal’s volumes have declined by 24 per cent over the past two years with a particular drop since January.
Said Ms. Gascon: “The longer this conflict goes on, the more such conflicts multiply, the more we approach the day where shipping lines will eliminate Canada as a reliable destination in North America. Whether it be port administrations here or in Western Canada, it’s our reputations that are on the line.”
The lockouts have halted almost all shipping of cargo containers – the intermodal boxes used to import and export clothing, electronics, machinery and food.
Workers at the Port of Montreal are locked out after longshore employees rejected a contract offer from the employers group on Sunday.Andrej Ivanov /The Globe and Mail
Canada’s two big railways last week stopped accepting trucks and trains bearing containers for export at their depots across the country. No trains are delivering exports to the ports, which have faced labour unrest for several weeks. Bulk grain for export is mostly unaffected but crops that move in containers are.
“It’s a significant impact,” said Jonathan Abecassis, a spokesman for Montreal-based Canadian National Railway.
The effects of the lockouts are being felt far from the docks of B.C. and Quebec.
At Huron Commodities in Southwestern Ontario, the lockouts have idled the company’s two food-grade soybean processing plants and halted exports to Japan, Europe, Southeast Asia and elsewhere. That’s because railways CN and CPKC have closed the gates at the Brampton and Markham yards to which Huron trucks its soybean containers.
“Those of us that rely on the container transportation system, we’re at a complete standstill,” said Martin VanderLoo, Huron’s project manager. The company, which employs 30 people, pays farmers for premium soybeans. It cleans, bags and loads them in containers, which are moved by truck, train and then ship to overseas makers of soy milk, tofu and other products. Mr. VanderLoo says the company exports up to 4,500 containers a year.
He said the company’s top executive is in Asia this week, pleading with customers not to switch to suppliers in the U.S. or other countries that are not as beset by frequent supply-chain snarls.
“These customers are saying to us, ‘Listen, we’re going to cancel our contracts and we’re going to redirect our purchases to the United States where we can rely on a consistent, reliable supply on an ongoing basis as opposed to you guys in Canada,’” Mr. VanderLoo said.
Canadian aviation training company CAE Inc. is also among the hundreds of exporters affected by the service disruption. The company, which ships flight simulators built in Montreal around the world, has been working on contingency plans both for its inbound parts supply and outbound shipments – redirecting to other ports as needed, said spokeswoman Aline Massouh. “It is a challenge,” she said.
Employer lockouts and strikes – or just the threat of them – have this year disrupted traffic at a handful of federally regulated transportation entities. These include a brief strike by WestJet Airlines’ mechanics, lockouts at both major railways, and last-ditch labour agreements at Air Canada and the Canada Border Services Agency.
CN’s Mr. Abecassis said the federal government should convene meetings with the sector to find a way to resolve stoppages before they occur. He said CN has never supported making freight railways an essential service.
“When you’re in Asia or in Europe or in the Middle East or in Africa, if you’re looking at Canada, you’re not looking at whether it’s the employer or the union or the ports or the rails – you’re just looking at the Canadian supply chain,” he said, “We’ve had a year marred with uncertainty and unpredictability and that sends a message to our trading partners that is extremely problematic.”
The Chamber of Commerce of Metropolitan Montreal on Monday called for the federal government to intervene immediately to get port activity moving again. It wants supply chains to be considered an essential service. “It is imperative to guarantee their proper functioning, even during difficult union negotiations,” the business group said.
The Port of Montreal, Canada’s second-biggest port, moves nearly $400-million in goods every day. It said three terminals would remain operational in the event of a lockout: the Bickerdike terminal, liquid bulk terminals and the grain terminal.
In B.C., talks to end the lockout that has halted container shipping were cancelled on Saturday. The BC Maritime Employers Association said it called off negotiations with the International Longshore and Warehouse Union after it saw no progress in a separate meeting with federal mediators. The union represent more than 700 supervisors at ports in the Vancouver area, Prince Rupert, Nanaimo and Port Alberni.