Canada's reputation as a reliable trading partner for the United States suffered another black eye Monday as Americans awoke to a new kink in the bilateral supply chain: a labour dispute at CP Rail that left more than 3,000 employees off the job for a second straight day.
By dint of sheer coincidence, a host of Canadian elected officials and business leaders, including Ontario Premier Doug Ford, happened to be in the U.S. capital on a variety of missions, one of them being the ongoing effort to shore up the Canada-U.S. trade relationship.
For Flavio Volpe, the outspoken head of the Auto Parts Manufacturers' Association, the goal had been to mitigate the damage Canada's reputation as a reliable supplier suffered during last month's weeklong blockade of the Ambassador Bridge between Detroit and Windsor, Ont.
“Tough timing,'' Volpe tweeted ruefully about the dispute, which he said he heard about on two separate occasions within an hour of landing in D.C. “We need to resolve this ASAP.”
Business Council of Canada president and CEO Goldy Hyder was also in town less than two weeks after an earlier spate of meetings on Capitol Hill - meetings in which he said U.S. lawmakers and counterparts were more worried about the prospect of a rail strike than anything else.
In those meetings, “I heard very clearly that the residue of the Ambassador Bridge episode was deeper than we perhaps realized - there was a high degree of frustration with allowing that to have happened,'' Hyder said in an interview.
“The risk of a (rail) strike was identified as yet another area where they would be concerned because the inflationary pressures that would be caused on Americans would be felt pretty quickly.''
Asked about what specific commodities prompted the most concern, “Oil, oil and oil were the first three,'' Hyder replied. “What I heard from them primarily was oil and food.”
Some US$27.6 billion worth of commodities from Canada entered the country by rail in 2021, data from the U.S. Department of Transportation shows. That includes more than 24 million barrels of Canadian crude oil during the last six months of 2021, according to the latest figures from the U.S. Energy Information Association.
It was clear from certain corners of the Biden administration Monday that the prospect of a drawn-out labour dispute at CP Rail is a troubling one.
One White House official said the administration is “closely monitoring the situation'' and taking part in “extensive conversations'' with the federal government in Ottawa - with a particular focus on the negotiations between CP Rail and the union, as well as the impact on supply chains.
“We are all hoping for a timely and fair resolution that benefits both parties and both countries,'' said the official, speaking on condition of anonymity in keeping with standard White House practice.
“It is important to remember that the parties continue to actively negotiate, and a Canadian federal mediator is fully engaged so we hope that the rail service will resume quickly.''
The official also pointed to the U.S. Department of Agriculture's plan to spend $250 million on developing domestic fertilizer production for American farmers, an effort to ease the cost impacts of persistent supply chain bottlenecks, sky-high gas prices and Russia's ongoing war in Ukraine.
The involvement of the White House is sure to turn up the heat on Labour Minister Seamus O'Regan, who was in Calgary to take part in the negotiations Monday and appeared to be resisting opposition calls to legislate CP Rail's 3,000 conductors, engineers and train and yard workers back to work.
“I don't intend to leave until we have an agreement,'' O'Regan said during virtual questioning in the House of Commons.
“I am optimistic, with people at the table and not leaving, that we will reach the deal that Canadians demand and want as soon as possible.''
During a brief speech that was livestreamed from a private meeting with members of the Canadian American Business Council, Ford didn't specifically mention the CP Rail dispute, but he did seize on the Ambassador Bridge blockade as evidence of the need to shore up Canada-U.S. trade routes.
“Recent events have proven the need to secure the cross-border supply chains that have been built over decades, tying our economies together,'' the premier said. “We will not accept any attempts to block our borders or interrupt our economy.”
Indeed, Ontario introduced legislation Monday aimed at preventing similar blockades. The Keeping Ontario Open for Business act would make permanent a number of emergency measures the province used last month to clear the blockade, an offshoot of nearly a month's worth of trucker protests in Ottawa.
“We will do everything in our power to keep two-way trade flowing, and we will call on our American friends to share the same commitment to removing obstacles,'' said Ford.
“That means rejecting Buy American measures that hurt us both, and embracing policies that benefit a strong North American partnership.''
The fear, Hyder said, is that every time the supply lines between Canada and the U.S. are damaged or cut, it's more ammunition for those protectionist forces south of the border to argue against using foreign suppliers for anything, be they friend or foe.
That will be especially important as North America ramps up efforts to secure the critical minerals so essential to the manufacture of electric vehicles, a cornerstone of climate change mitigation and economic recovery in both Canada and the U.S.
“The reputational thing will start to stick, and we don't want that,'' Hyder said.
“I think that the way to counter that is to play offence - remind the folks down here about all the things that do work well, that are critical to their well-being, including not just in the present but in the future.''
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