Business leaders welcome release of the Indo-Pacific Strategy

Letter to the co-chairs of the National Supply Chain Task Force, in support of their work to provide recommendations to the Minister of Transport that strengthen the efficiency and resiliency of Canada’s supply chains.

Dear Ms. Louise Yako and Mr. Jean Gattuso:

The Business Council of Canada is composed of the CEOs of 160 of Canada’s leading companies, in all sectors and regions of the country. On their behalf, we are writing to provide feedback on your work to strengthen the efficiency and resiliency of transportation supply chains.

First and foremost, we encourage you to be forward-thinking in your recommendations and to embrace a strategic approach to transportation policy that positions Canada for long-term economic growth. As the federal government’s Industry Strategy Council noted in its December 2020 report, investments in trade infrastructure and similar nation-building projects improve the country’s ability to withstand economic shocks, reduce the burden of public debt, and help to generate the tax revenues that are needed to address Canada’s aging population.

We offer three specific recommendations to guide your work:

  1. Canada needs a national transportation strategy

    In his statutory review of the Canada Transportation Act in 2015, The Honourable David Emerson called on policymakers to develop a national freight transport and logistics strategy. In 2017 the Advisory Council on Economic Growth recommended a similar approach. Years later such a strategy is still missing.

    A national strategy that is developed collaboratively by the federal, provincial and territorial governments – and supported by an efficient, predictable regulatory environment – would strengthen economic growth and materially improve the quality of life of Canadians in every region. A well-defined strategy can help align public investments in trade-enabling infrastructure and attract higher levels of private sector investment.

  2. Improve the reliability and security of Canada’s critical economic and trade
    infrastructure


    Canada’s supply chains have faced unprecedented disruptions in recent years. The
    COVID-19 pandemic, illegal blockades, extreme weather events, and railway worker
    strikes are just a few of the challenges Canadians and Canadian companies have had to face. In light of this, we believe the federal government can and should do more to protect Canada’s supply chains from future disruption.

    For example, the federal government should ensure that it has the authority to prevent work stoppages that threaten the operation of railways, ports, terminals and other vital transportation infrastructure. The federal government should be able to compel parties into binding arbitration prior to a work stoppage, to prevent disruptions to essential services, such as rail and ports.

    Portions of Canada’s vital transportation networks have been subjected to illegal
    blockades several times. These blockades caused significant economic disruption and
    damaged the country’s reputation as a reliable trading partner. The government should seek to protect critical trade infrastructure by establishing a clear federal authority to respond to actions that would seriously disrupt the economy.

    We note that the federal government has committed to creating a National Adaptation Strategy to enhance the country’s ability to respond to a changing climate. Our hope is that the strategy will include a strong focus on protecting transportation networks from extreme weather events.

  3. Promote public and private investment in Canadian supply chains

    As a trade-dependent country, Canada must invest strategically in infrastructure that
    improves our ability to deliver goods and resources to global markets. Efficient
    transportation networks are vital to ensure that Canada maintains its top-10 market share as supplier of commodities such as potash, nitrogen, grain, pulse crops, titanium, gold, aluminum, and natural gas.

    The National Trade Corridors Fund is an important lever that can unlock private and public sector investment in trade-enabling infrastructure. The federal government should ensure that the Fund has the resources to address longstanding bottlenecks and supply chain challenges. Of equal importance is the need to ensure that the Fund is capable of rendering decisions in a timely manner.

    Finally, we urge you to think creatively about how Canada could encourage higher levels of investment in economic and trade-enabling infrastructure. When he was Chair of the Caisse de dépôt et placement du Québec, Michael Sabia spoke about the benefits of asset-recycling programs, saying they give governments “the financial flexibility to take on new and innovative infrastructure projects.” Australia’s recent experience with asset-recycling offers useful lessons for Canada. By creating a two-year window during which states and territories were encouraged to sell off assets, Australia’s national government helped unlock more than $17 billion worth of investment in new port, highway and freight infrastructure.

    In closing, I want to thank you on behalf of the Business Council of Canada for your willingness to lead the National Supply Chain Task Force. In appointing you as co-chairs, The Honourable Omar Alghabra observed that “an efficient and reliable transportation network is key to Canada’s economic growth.” The work you are doing has important implications for all Canadians.

    Sincerely,
Goldy Hyder