A strike among B.C. cargo loaders at some of Canada’s biggest ports might push prices higher for consumers across the country if the work stoppage stretches much longer, experts say.
The strike, which began Saturday morning and was in its fourth day on Tuesday, is snarling traffic at the Port of Vancouver — Canada’s busiest port — as well as roughly 30 marine gateways across B.C. More than 7,000 B.C. cargo loaders are pushing for higher wages and job security in negotiations with their employers.
The seamless loading and unloading of cargo ships in B.C. is critical to the smooth functioning of Canada’s economy, and an extended disruption is certain to impact consumers, according to experts who spoke to Global News.
B.C. ports handle an estimated 25 per cent of all imports and exports in Canada worth an estimated $350 billion last year alone, said Fraser Johnson, professor of operations management at the Ivey School of Business in London, Ont.
Johnson said that the Port of Vancouver is Canada’s “gateway to the east,” handling the bulk of trade from China, Taiwan, Japan and Korea as well as some trade with the United States.
He said that consumer electronics, clothing, appliances and cars are among those goods that typically flow through B.C. ports — and are now sitting unloaded in cargo containers off Canada’s west coast.
Johnson said that many retailers are currently stocking up for their fall inventories, and a protracted strike could see delays in when those products hit the shelves.
Other shipments that have yet to arrive could be diverted to other ports in the U.S. or the Port of Montreal or Halifax, he said as an example.
But adapting shipping routes comes with costs that have knock-on effects through Canada’s supply chain, he said, which are likely to be passed on to consumers in some form or another.
“All of these things ultimately end up to a higher cost for the retailers, for the producers, and ultimately higher prices for the consumers,” Johnson said.
Michelle Wasylyshen, spokesperson for the Retail Council of Canada, told Global News in a statement on Tuesday that “if this work stoppage lasts, then there will be impacts both on the supply of goods and on consumer prices.”
“Delays cost money because shipping companies charge for the time goods are on ships, trains, trucks or container terminals. Alternative transportation methods will also come with an additional cost,” she said.
The disruptions won’t be immediate if there’s a quick resolution to the labour dispute, Wasylyshen said, “but consumers could start to see an impact the longer this goes on.”
Johnson said that if the strike lasts “for a week or two,” consumers will start to notice the impact of the B.C. port disruption in a similar way that supply chain snarls became headline news during the recovery from the COVID-19 pandemic.
“Supply chains are complicated and integrated animals in the sense that ports are one important part of the supply chain, but they’re also connected to the road system, to the rail networks,” he said.
“It won’t take a lot of disruption in terms of a strike at the Port of Vancouver to start to hit consumers, both in terms of availability and in their pocketbooks.”
Pedro Antunes, chief economist at the Conference Board of Canada, told Global News that a prolonged strike of a week or more could start to have a tangible impact on inflation, just as price pressures are showing signs of easing.
Canada’s overall inflation rate cooled to 3.4 per cent year-over-year in May, but prices for food purchased from the grocery store rose at a persistently high annual rate of 9.0 per cent.
While some foods imported from abroad might be caught up in the strike, Antunes said that fresh produce is not typically imported through B.C. ports — that tends to come by truck and rail from elsewhere in North America.
Global News reached out to Canada’s top grocers – Loblaw, Metro and Empire Co. – to ask how they were preparing for possible strike impact. Loblaw referred Global News to the Retail Council of Canada, while the others did not respond before publishing.
With food inflation sticky and pressures possibly creeping back up as a result of renewed supply chain snarls, Antunes said an inflationary flare-up tied to the B.C. port strike would hit consumers at the worst possible time.
“The last thing that Canada really needs as we’re fighting inflationary pressures and the Bank of Canada is raising interest rates to stem the tide on inflation … is another hiccup to essentially hit consumer prices up,” he said.
The strike at B.C. ports is the latest disruption to Canadian trade in recent years amid flooding on the West Coast in 2021 and blockades at the Ambassador Bridge and in Coutts, Alta., disrupting border crossings to the U.S. last year during the so-called “Freedom Convoy” protests.
Antunes said that Canadian supply chains are “intricately tied” to the rest of the North American economy, and the country’s ability to keep goods flowing is part of what convinces businesses to invest money in Canada.
“Any blips here in terms of our ability to deliver on products causes another concern, which is a longer-term investment decision of where those dollars are going,” he said.
Johnson agreed that Canada’s reputation will be at stake if it’s unable to resolve the situation quickly.
“Organizations don’t like instability,” he said, adding that puts pressure on both sides of the bargaining table to find a quick resolution for all parties involved.