Bold Canadian Port Reform is Needed...Now More Than Ever
March 5, 2025
Halterm Container Terminal in Halifax, Canada
Image Source: https://www.porttechnology.org/news
The reality of a U.S. initiated trade war sparked by the imposition of tariffs aimed at crippling the Canadian economy is upon us. The threat has been over our heads for several weeks and the vast majority of Canadians have called for unity, and a calm, measured response. Moreover, Canadian leaders have finally been talking seriously about breaking down interprovincial barriers and unleashing a potential $200 B in internal trade.
British Columbia Premier David Eby commented that provinces and territories “need to start acting like a country” on trade. British Columbia is willing to enter bilateral agreements with other jurisdictions if the federal government can’t get an agreement. Eby stated his government could enter a “coalition of the willing” with other provinces to recognize each other’s regimes for trade and professions, and if a product is good enough to be sold in one area, then it’s good enough for B.C.
Transport and Internal Trade Minister Anita Anand said Friday (February 28, 2025) that she wants to boost internal trade by getting the provinces to recognize out-of-province labour certifications and regulations. Anand was meeting with the Committee on Internal Trade, made up of provincial and territorial trade ministers. The federal government says since 2017 it has eliminated 20 of 39 federal exemptions in the Canada Free Trade Agreement.
The Canadian Free Trade Agreement (CFTA) came into force on July 1, 2017, to reduce and eliminate barriers to the free movement of persons, goods, services, and investments within Canada and to establish an open efficient, and stable domestic market. The CFTA contains exceptions whereby portions of the agreement can be taken by federal, provincial or territorial governments, to exclude an industry, sector, or legislation from the agreement. Canadian business and industry have expressed that these exceptions can hinder free trade by allowing for inconsistent rules, standards, and licensing requirements for goods, investments and services.
As mentioned above, some of the federal exceptions have now been removed from the CFTA as a step towards eliminating barriers to internal trade, reducing costs for Canadian businesses, increasing productivity and foreign investment, and adding billions to the Canadian economy. The majority of exceptions removed relate to government procurement, providing Canadian businesses greater opportunity to compete across the country. The next step is for provinces to look at the exceptions they have insisted on and taking steps to remove them1.[1]
Along these lines, earlier last week, Nova Scotia Premier Tim Houston said he would introduce a bill aimed at reducing interprovincial trade barriers. Anand said she commended Houston for his efforts and she hoped other provinces would follow suit.
In short, there is good momentum within Canada to respond to this existential crisis in a mature, thoughtful way that considers more than just retaliation and also address systemic solutions that will strengthen the Canadian economy and lead to economic independence over the long-run.
These are excellent efforts and that can and must lead to real actions that will spur economic security and growth. One of the key issues though is the need to diversify external trade opportunities by accessing more foreign markets in greater quantities. Canada has much to offer markets in Europe and Asia with respect to energy products and finished goods. To this end we need to look at the whole of the supply chain and develop solutions that make Canada not only competitive but a leader in trade in more sectors and with more jurisdictions around the world. We can and know how to play well with others.
One major roadblock to the rapid improvement in Canadian trade performance on the global stage is the poor performance of our port facilities. There are two significant streams of action that must be contemplated and acted on to remove the bottlenecks created by years of subpar performance in the maritime sector.
The first is the need for significant capital investment to move goods either east or west through ports in the Maritimes or B.C. and. We should include the potential of developing northern ports too, but this has to be looked at cautiously to ensure the decisions made have the appropriate long-term consequences economically, socially, and environmentally.
The development of new port facilities on the three coasts and the rehabilitation and upgrading of current port facilities is a necessary investment to secure foreign markets for Canadian products. However, the stumbling blocks that hinder rapid development of these vital port assets are significant and deep rooted. Overcoming them will take bold, thoughtful leadership. In the end we cannot afford to be at the bottom of the list when it comes to productivity at our port facilities. We have to be in the lead in terms of labour productivity, implementation of leading-edge technologies, integration of supply chains and transportation infrastructure, and cost effectiveness.
To accomplish this, we have to establish a regulatory regime that is geared towards facilitating investment and that offers real financial security for investors. This means establishing expeditious permitting processes and streamlined regulatory requirements. It means establishing a unified economic doctrine that unites the interests of all groups under the umbrella of Canadian sovereignty.
We do not advocate over-riding or dispensing with requirements for Free Prior and Informed Consent. Rather we need to develop an accepted set of criteria that serves the long-term interests of Canadians and the indigenous people we share this land with. The right solution will also ensure the economic security needed as a foundation for indigenous self-determination and self-government amongst the indigenous communities impacted by the long-term strategy to secure Canadian sovereignty.
The second stream of action is to breakdown the antiquated and problematic labour model that plagues our ports. We are referring here to the imposition of a “Hiring Hall” system that restricts labour supply, drives costs up and unduly interferes with the investment in new technologies that will drive productivity forward (and ensure worker safety). The International Longshore and Warehouse Union on the west coast (ILWU) and the International Longshoremen Association on the east coast (ILA), both American-based labour organizations, perpetuate a hiring hall model the gives them monopoly control over labour supply in our ports, these unions advocate positions that have stifled innovation and progress and their existence enables them to engage in criminal activities that ruin the reputation of our ports.
This has to be addressed in a strategic and fair way that ensures maritime workers are able to access fair, honest and forward-thinking union representation so that workers can be equitable stakeholders in the development of these important Canadian assets.
It is essential that we recognize and articulate the existence of this problem and not continue to blindly sweep it under the rug. The unions have gone too far in interfering with our economic needs for efficient world class ports and thus have put themselves in a position that they must accept reform.
How would we go about transforming maritime workforces into world class leaders in port performance? The answer to solving the first part of the problem (i.e. attracting investment capital) is essential. So, we need to do a number of things quickly and thoroughly to get going.
The Hiring Hall model has to be outlawed. Doing so means rethinking how maritime activities are organized commercially and how the current labour market functions, establishing the rules that will prevail in the future and ensuring that the rights of maritime workers particularly the right to be represented by a union are maintained.
Also, an independent enquiry has to be launched into the existing model and how existing labour representatives perform their duties. Action must be taken to eliminate corruption and criminal activity and hold anyone who has perpetuated these activities accountable.
In some instances, the federal government may need to mandate the adoption of labour-saving technologies that improve productivity and worker safety.
We cannot allow American-based labour organizations to dictate what is or isn’t allowed in terms of investment in our national port assets. We absolutely support the rights of workers to negotiate collectively. However, the hiring hall model and these legacy issues that have mired the maritime sector for so long have made progress nearly impossible.
If we are honest the current model serves to perpetuate a system which favours restriction in labour supply and promotes dysfunction in terms of any adoption of productivity improving technology in order to extract excessively high wages for minimal effort. As Canadians we have been perhaps too polite to call this out in the past but now we are in a struggle for our national identity as a trading nation and we cannot allow a small interest group from a foreign nation (the U.S.A.) dictate to us how our assets should be developed.
As Canadians we are sometimes too reluctant to wave the flag and express ourselves. However, a performance assessment by the World Bank and S&P Global Market Intelligence places Canada’s three biggest ports in the bottom 15 per cent of more than 400 container ports for 2023, due mainly to vessel wait times. Montreal came in 348th, Vancouver 356th and Prince Rupert, B.C., 399th out of 405 ports on its list. This is a national embarrassment.
It is foolishly naïve not to recognize that the ILWU and the ILA contribute to this poor performance. It is also naïve to think that the solutions won’t hurt. It is inevitable given the history of these unions that they will fight to preserve a model that serves their interests and arguably benefits the US based ports ahead of Canadian ports, with little regard as to how it impacts on our nation. A trade war is a war and requires thoughtful action to fight for our long-term interests.