Q1: What is the importance of the Port of Montreal to the Canadian economy?
- Port of Montréal is a key international and domestic gateway of critical importance to the Canadian economy.
- It is the 2nd largest container port in Canada and the largest on Canada’s East Coast. The Port handles $275 million worth of cargo daily and supports more than 19,000 direct and indirect jobs.
Q2: What kind of goods transit through the Port of Montreal?
- Containerized products handled at the port represent around 40% of the total tonnage. The top containerized cargo are food products, forest products, and grains/cereals.
Q3: What is the status of Canada’s transportation system?
- Over the last two years, Canadian businesses have absorbed impacts from trade tensions, rail blockades, lockdowns, container shortages, the blockage of the Suez Canal, and a historic economic crisis.
- Disruptions in the transportation network cause cascading negative economic effects across the entire country. These negative impacts have been accumulating, with each new disruption causing more damage.
Q4: What are the negative economic impacts of the labour disruption at the Port of Montreal?
- The economic impact of the pandemic has already placed our transportation system under unprecedented stress, so the strike at the Port of Montreal is particularly harmful to the Canadian economy.
- The strike at the Port of Montreal is estimated to cost the Canadian economy between $40 million and $100 million of permanent losses every week.
Q5: How is the work stoppage affecting jobs?
- The Montreal Port Authority estimates that Port activities sustain 19,000 jobs. This includes both direct jobs (e.g. people who work for terminal operators) and indirect jobs (e.g. people who transport goods to and from the Port).
- However, the strike is having important knock-on effects on businesses across Canada. The longer the strike lasts, the more severe the negative job impacts.
Q6: How are exporters affected by the strike?
- In 2020, nearly seven million metric tons of containerized cargo were exported through the Port of Montreal.
- Exporters may experience penalties for missed delivery deadlines, lost sales, wasted products, and additional storage costs.
- Many small and medium businesses are unable to reroute their exports through other ports.
Q7: What activities at the Port are continuing?
- Bulk grain loading/unloading activities are protected under the Canada Labour Code, while liquid bulk (e.g. oil, gasoline) workers are represented under a different union. These activities continue.
- In addition, resupply activities to Newfoundland and Labrador must continue throughout any strike.
Q8: What quantity of cargo is impacted by the strike?
- In total, approximately 356,000 tons of cargo per week are impacted by the strike, representing about 53% of total tonnage handled by the port.
- However, high value goods are among the hardest hit. The full strike prevents each week the transportation of containerized goods of a value of $ 270 M.
- The restriction of the circulation of goods has powerful negative effects that hamper Canadian businesses across the country. It is estimated that the strike costs each week between 40 and $ 100 M in permanent losses to the Canadian economy.
Q9: If grain is still moving through the port, how are farmers being impacted?
- Only bulk grain activities continue. No containerized food products are being shipped. Food products, grain, and cereals make up one-third of the total containerized traffic at the port.
- Agricultural producers will soon struggle to obtain key fertilizers critical for spring planting. If fertilizer does not arrive on time, farmers will lose millions of dollars.
- Fertilizer Canada reports that, if the strike continues, up to one million acres in Eastern Canada may go unfertilized just next week. Even a minor disruption to fertilizer supply could have an impact of over $1 million per day in Quebec.
Q10: Can the Port of Halifax and the Port of Saint John handle diverted cargo?
- Not entirely. The Ports of Halifax and Saint John do not have enough capacity to handle all of the cargo from Montreal.
- During the 2020 strike, many containers were rerouted to the Ports of Halifax and Saint John, but the transportation infrastructure was unable to cope.
- No specific traffic data from the ports is yet available, but two container ships have been diverted from Montreal to Halifax and Saint John.
Q11: Are there no other options for transporting this cargo?
- The Ports of Halifax and Saint John do not have enough capacity to handle all of the cargo diverted from Montreal.
- Some cargo may be able to transit through U.S. ports, but at much higher prices. For many small and medium businesses, these additional costs are prohibitive.
- For perishable goods, the additional transit times may cause the cargo to spoil before reaching its destination. Millions of dollars of fresh produce spoiled during the previous strike.
Q12: Why did the Government decide to introduce back-to-work legislation even before the full strike started?
- Even before the full strike, maritime shippers and rail carriers had begun avoiding the Port of Montreal, fearing their goods would be stranded.
- In March 2021, as the truce was ending, container traffic at the Port of Montreal fell -10% year-over-year, even though the Port was nominally working at full capacity.
- The situation further deteriorated with the start of the partial strike on April 13. This reduced the Port’s capacity by 30%, or $90 million worth of cargo per week. Containers quickly began to accumulate at the Port. Rail carriers reduced their services to the Port, so exporters struggled to get their goods to market.
- Although the full strike officially only began on April 26, the negative impacts of the labour dispute have been accumulating for a long time.
Q13: What regions of Canada are negatively impacted by the strike?
- Although the local economy of Montreal is hardest hit by the strike, losses are being profoundly felt across Quebec, Ontario, and beyond.
Q14: How are small and medium enterprises affected by the strike?
- Many large corporations have secured alternative shipping arrangements through other ports. Small and medium enterprises in Québec and Ontario do not always have the resources to do the same.
Q15: Is the movement of critical medical goods affected by the strike?
- Yes. No critical containers have moved since the beginning of the strike. As of yesterday (April 29), no critical containers were being moved. There were 15 critical containers on the dock, and 121 critical containers on ships headed for the Port of Montreal, for a total of 136 critical containers impacted by the strike.
- These critical goods include COVID-related products, high-priority medical equipment, and pharmaceuticals.
- Hospitals and drug manufacturers could quickly face shortages of dialysis products and ingredients required for the production of key medications.
- The influx of containers at the Port of Halifax has reduced its ability to move critical goods efficiently.
Q16: What is the definition of a critical container?
- The Montreal Port Authority uses an AI system to prioritize cargo deemed critical during the pandemic.
- Critical units are identified based on lists of types of critical goods from the Canadian Border Services Agency.
- Generally, the top five critical goods transiting through the Port of Montreal are:
- Pharmaceutical products;
- Medication;
- Various medical products/supplies;
- Medical equipment/PPE; and
- Disinfectants and soaps
Q17: How much PPE is currently at the Port?
- As a rule, shipping companies do not share the specific contents of their containers in order to protect the security and confidentiality of their clients’ goods.
- Overall, there are 15 critical containers on the dock (five of which hold high-priority COVID-19 equipment) and 121 critical containers on ships destined for the Port of Montreal, for a total of 136 critical containers affected by the strike.
- No critical containers have moved since the beginning of the strike.
Q18: The Union has promised to continue to load and unload critical goods. Why are critical goods still at risk?
- No critical containers have moved since the beginning of the strike.
- No ships are being unloaded, and rail lines are not fully servicing the Port of Montreal, so many critical goods cannot get to their ultimate destination, regardless of actions taken by the Union.
- The Port reports that there are 15 critical containers on the dock (five of which hold high-priority COVID-19 equipment), and 121 critical containers on ships destined for the Port of Montreal, for a total of 136 critical containers affected by the strike.
Q19: Is Canada’s food sector affected by the strike?
- Yes. As the strike continues, millions of dollars of fresh produce will spoil, causing higher costs and food insecurity. Local shortages of food products such as oil, pasta, and cheese, could begin within weeks.
- Agricultural producers will soon struggle to obtain key fertilizers critical for spring planting. If fertilizer does not arrive on time, farmers will lose millions of dollars.
Q20: What other key sectors are impacted by the strike?
- Canada’s automotive industry: The Port of Montreal imports engines and other vital components that guarantee uninterrupted operation of Canada’s automotive factories.
- Canada’s forest industry has already spent tens of thousands of dollars to reroute shipments, often through U.S. ports.
- The construction industry: The strike is occurring at the beginning of the construction season, which threatens companies’ ability to secure materials and complete projects on time and on budget.
Q21: What specific companies have contacted the government about the strike?
- Many stakeholders shared sensitive commercial information on the impacts of the strike with the government with the expectation that the information would remain confidential. The government intends to keep this promise.
- However, credible industry associations have released impact assessments for their respective industries. The government estimates that the strike is costing the Canadian economy between $40 million and $100 million of permanent losses every week.
Q22: Is the Government exaggerating the economic impacts of the strike?
- No. The strike at the Port of Montreal is having a severe impact on Canada’s economic recovery.
- The economic impact of the pandemic has already placed our transportation system under unprecedented stress, which has magnified the economic damage of the strike.
- Businesses across the country and in many important sectors have been hurt, with small and medium-businesses shouldering some of the most severe impacts.
- The strike at the Port of Montreal is estimated to cost the Canadian economy between $40 million and $100 million permanent losses every week.
- Canada’s reputation as a reliable trading partner has been damaged, reducing our ability to attract investment.
Q23: Can you provide evidence that costs are going up in key sectors?
- Canadian businesses have already seen major impacts from the uncertainty generated by the on-going negotiations, the partial strike, and the full strike.
- Stakeholders are reporting that transportation costs through other ports, if available, are often several times higher than the cost of shipping through Montreal.
- For example, Maersk has announced a service fee to cover the extra costs of port diversion. Hapag Lloyd increased shipping costs by hundreds of dollars per container to the Montreal region.
- These costs will be ultimately passed on to consumers and businesses in Canada.
Q24: Many port activities are not affected by the strike. Is it truly serious enough to warrant back-to-work legislation?
- In total, approximately 356,000 tons of cargo per week are impacted by the strike, representing about 53% of total tonnage handled by the port.
- This traffic cannot simply be diverted to other ports.
- The strike is estimated to cost the Canadian economy between $40 million and $100 million of permanent losses every week.
Q25: How has the government calculated the economic repercussions of the strike?
- Transport Canada’s assessment of the economic repercussions is based on an economic modeling methodology that captures the direct repercussions of the closing of port activities and the indirect repercussions on other sectors of the economy. The results are validated with the industry and stakeholders.
- We are convinced that our impact estimates predict with accuracy the damages caused by the strike to the Canadian economy.
Q26: Has the introduction of this legislation caused vessels to reroute to Montreal?
- The longer the strike continues, the greater and widespread the negative economic impact on Canada’s economy.
- Key players are in wait-and-see mode. If this legislation passes, they are prepared to reroute their cargo to Montreal.
- However, key players are also hedging against the severe disruption that would follow a failure to promptly pass this legislation.
Q27: Are ships actually waiting in the port to off-load? I thought all ships had diverted away from Montreal.
- Not all ships have diverted away from the Port of Montreal due to the ongoing strike.
- Our information indicates that four vessels are currently waiting at anchor and that these ships are carrying a total of 67 critical cargo containers.
Q28: What were the negative economic impacts of the labour disruption in 2020?
- Critical goods, including key medical products, were stranded at the Port of Montreal for days.
- The Canadian Federation of Independent Business estimated that 40% of SMEs in Quebec were impacted.
- The strike cost wholesalers approximately $600 million in lost sales.
- Even after the strike ended, it took three months to clear the backlog of containers.
Q29: What are the long-term risks of the labour disruption at the Port of Montreal?
- This labour disruption, the second in less than a year, is damaging Canada’s reputation as a reliable trading partner.
- This is especially true now; a reputation for resiliency is truly tested in difficult economic times.
- Canadian firms cannot capitalize on new trade agreements signed with European and Asian partners without reliable transportation networks.
- As the economy recovers from the effects of the pandemic, Canada’s ability to attract investment and create jobs has never been more important.
Q30: What is the role of the Montreal Port Authority?
- The Montreal Port Authority is an independent, arm’s length corporation that manages the Port of Montreal.
- The Montreal Port Authority is not directly involved in the labour negotiations between the Maritime Employers Association and the CUPE local 375.
Q31: Will the Port Modernization Review have an impact on labour relations at federal ports?
- The Port Modernization Review is progressing well.
- Transport Canada has conducted extensive research and analysis to improve the effectiveness of Canada Port Authorities as key gateways and to support economic growth.
- We are incorporating emerging impacts on the Canadian economy and supply chain, such as COVID-19.
- In October 2020, Transport Canada released a What We Heard report that summarized the feedback from our engagement with Aboriginal communities, stakeholders and written submissions.
- We look forward to announcing the next steps in this mandate.