Canadian Labor Minister Steven MacKinnon has exercised federal powers to end ongoing work stoppages at the ports of Vancouver, Prince Rupert, and Montreal, marking a critical move to address escalating disruptions in Canada’s supply chain. With final and binding arbitration now ordered, both the labor unions and port ownership will have to settle their disputes under imposed terms.
The strikes, impacting major Canadian and U.S. trade channels, had halted operations at Vancouver and Prince Rupert since November 4. Port management at Montreal also locked out dockworkers, further complicating an already strained supply network. As a result, the backlog of container shipments headed for Canadian and U.S. companies has led to mounting congestion, with retail supply chains particularly affected.
“The disruption these disputes caused to retail supply chains were severe, and all at our busiest time of the year,” the Retail Council of Canada noted in a statement to CNBC, emphasizing that the ripple effects from these interruptions would take weeks to ease. They assured Canadians that essential retail goods would remain available, but full sector recovery would not be immediate.
For the United States, the effects are also far-reaching. Roughly 20% of U.S. trade arrives through Vancouver and Prince Rupert, making Canada’s ports crucial to cross-border logistics. The strikes came after union leaders and industry representatives failed to reach an agreement before the cooling-off period, leaving the ILWU Local 514 contract unresolved since its expiration on March 31, 2023. In September, 96% of union members had voted in favor of the strike, setting the stage for the current standoff.
Rail trade between Canada and the U.S., which accounts for approximately 14% of the $382.4 billion bilateral trade value recorded in the first half of the year, has also faced pressure. U.S. Census data points to nearly $572 million in container trade crossing daily from Canada to the U.S., and Stephen Lamar, CEO of the American Apparel & Footwear Association, highlighted the urgency of resuming operations at Canada’s three busiest ports. Lamar commented that “the lockouts of the Canadian ports were causing ships to divert and contributing to congestion and delays throughout North America.”
Minister MacKinnon, addressing the press, noted that negotiations had reached a “total impasse,” leaving federal intervention as the only viable solution to prevent economic and reputational damage to Canada. He underscored that the ongoing stoppages threatened Canada’s image as a reliable trade partner, impacting more than $1.3 billion in goods each day.
This move marks the second time MacKinnon has used his authority to halt labor disputes, citing section 107 of the Canada Labor Code to mandate binding arbitration. Earlier this year, he stepped in to resolve lockouts affecting Canadian Pacific Kansas City and the Canadian National Railway Co., redirecting those negotiations to the Canada Industrial Relations Board. Under the terms of this latest intervention, current collective agreements will remain in force until a new settlement is reached.
Source:CNBC
