Canada: Grain trade reputation on the line

Canada’s reputation in international grain markets took another hit when the most recent labour dispute shut down six grain terminals in Vancouver, industry says.

Workers reached a tentative deal late last week, but transportation observers say the damage is being done.

“Every two years, roughly, we end up with some form of labour issue, and this year it’s like a double whammy,” said Mark Hemmes, president of Quorum Corp., which monitors Canada’s grain shipping industry. “Our reputation has been sullied in a big way. This just compounds it.”

When grain terminal workers at the Port of Vancouver walked off the job Sept. 24, it was the second disruption in as many months to the grain transportation system.

Through August, eyes were locked on an impending work stoppage that promised to grind both of Canada’s major railways to a halt just as Western Canada’s new crop was coming in. Both railways locked out workers Aug. 22.

Within hours, the federal government intervened, referring the matter for binding arbitration. Trains at Canadian National Railway were up and running the following day, and Canadian Pacific Kansas City trains (where workers did follow through on strike action) followed several days later.

While a wider crisis was averted, Hemmes noted that damage was done. The supply chain was backed up, and shipment of certain products, including fertilizer, had been stymied in prior weeks in anticipation of the shutdown.

Kyle Larkin, executive director of Grain Growers of Canada, said he’s extremely concerned about Canada’s reputation as a reliable trade partner.

“Our international reputation has been battered over the past few months and over the past few years,” he said, citing the fragile relationships Canadian exporters develop with their clients, particularly in Asia.

“You don’t get customers overnight. It takes a long time to create those relationships, foster those relationships, and make business deals, and it’s even easier to lose them.”

Larkin is worried that recent supply chain disruptions will prompt buyers to look elsewhere.

“There are other countries out there that are in the same markets that we are, be it the Americans, be it the Australians, be it the Brazilians, and they’re out there working every single day growing their markets,” said Larkin.

“We are as well, but it becomes a lot more difficult when we actually can’t deliver the product.”

The latest labour dispute was between Grain Workers Union Local 333 and the Vancouver Terminal Elevators Association (VTEA), comprised of companies that operate the affected grain terminals. Negotiations had been ongoing since November 2023. The collective agreement expired in December 2023.

In July, at the request of the VTEA, the Federal Mediation and Conciliation Service was brought in. That ended in August without a new collective agreement.

On Sept. 12, union members voted in favour of a strike. On Sept. 21, the union delivered a 72-hour strike notice and the strike began at 7 a.m. Sept. 24 with workers picketing outside six terminals. Affected terminals included Alliance Grain, Cargill, Cascadia, G3 , Pacific Elevators and Richardson International.

The labour action did not affect other ports. The Fraser Grain Terminal in the Fraser River and the Prince Rupert terminal continued to operate.

“In our opinion, what we’ve offered is very fair and reasonable,” said WGEA executive director Wade Sobkowich last week. “We’ve offered to pay the lowest paid worker at a terminal, which is a janitor, $50 an hour, plus $7.44 in benefits. And that wasn’t good enough for the union.”

Sobkowich said the biggest sticking points were wages, benefits and scheduling.

“We’re asking for the right to not schedule work on statutory holidays at our choosing,” he said. “So, if we don’t have volumes, or there aren’t rail cars to unload on a statutory holiday, we would like the right to say we’re not scheduling work on that day and therefore not paying double time.”

In terms of wages, Sobkowich said the union rejected an offer of a five per cent, four per cent, four per cent and three per cent increase over the next four years.

The Grain Workers Union did not respond to a request for comment, but in an interview with CBC Vancouver’s Gloria Macarenko, union president Douglas Lea-Smith said negotiations with the VTEA had been fraught with difficulties.

“It’s not constructive at all. What we’re faced with is an employer that barely bargains with us and drags their feet,” he said.

Lea-Smith said the biggest sticking point for his members revolved around what he called “lieu days,” essentially days off that an employee earns after working on a holiday. He said the VTEA wants to eliminate those, although it had softened that stance as negotiations continued.

Sobkowich rejected the notion that the employers were dragging their feet.

“We’re highly motivated to get a deal done. We’re in a peak period,” he said. “When it comes to collective bargaining, most people want to think about it in terms of right and wrong, but it’s not really about right and wrong. It’s about perspective and leverage, and the union has managed the plot to give themselves maximum leverage in the timeline.”

Fall is the busiest time for grain shipments, and a prolonged strike could have hit farmers hard. Grain Growers of Canada estimates volumes of up to 100,000 tonnes were held up for every day of the strike, costing roughly $35 million per day.

“The impacts are real,” said Larkin. “Grain elevators across the Prairies are going to start getting backed up and farmers won’t be able to sell their crops that they’re harvesting right now.”

After the strike began, commodity group called on government to use all available tools to get the parties to an agreement. Larkin said that included the kind of binding arbitration referral that was used to end the rail stoppage in August.

“We called for the minister to impose binding arbitration during the dual rail work stoppage because of the risk to not only domestic food security but also international food security,” said Larkin.

“I think those reasons remain with this strike, seeing that over 50 per cent of the grain that’s produced across Canada goes through the Port of Vancouver.”

For many, binding arbitration is a nuclear option, and Larkin conceded that, since this strike affected only grain, it might have had less traction with the federal government.

“There certainly is a lot of politicking happening in Ottawa right now, be it supply and confidence agreements or motions of non-confidence, so I think most of the government’s attention is being pulled elsewhere,” he said.

Larkin said he appreciated the work of labour minister Steven MacKinnon on the file, which brought the two parties back to the negotiating table. He was confident that all parties were negotiating in good faith, given their track records.

“The Grain Workers Union local 333 has a great history of collective bargaining with their employer, and I would say the same for the employer as well,” said Larkin.

“This isn’t a situation that we see every year with this union and this employer, which is a good sign. We’re hoping that they can come to an agreement at the table, obviously, as soon as possible.”

In a statement, the National Farmers Union noted its solidarity with terminal workers.

“As grain farmers, we recognize how disruptive labour action is at this critical season for grain shipments,” said NFU member Cam Goff. “It has always been our position that a negotiated settlement is best.”

On Sept. 23, Agricultural Producers of Saskatchewan issued a release outlining their concerns.

“This is another gut punch for farmers,” said APAS president Ian Boxall. “Our farmers are again caught in the crossfire of labour disputes far from their fields, facing the consequences of halted grain shipments. It’s high time for assertive government action to safeguard our supply chain integrity.”

Keystone Agricultural Producers followed suit a day later, calling for immediate resumption of activities at the Port of Vancouver.

“Producers already face a massive amount of pressure during the annual harvest season to get crops in the bin,” said KAP president Jill Verwey. “This disruption at such a critical time of year will only add further stress to producers as they work long hours to get harvest complete, not knowing if there will be a transportation system to get that product to market.”

Hemmes said things could have become serious for farmers if the strike had been prolonged.

“If it’s just a couple of days, it’ll be a problem. But if it goes longer, it becomes a huge problem, because they’re not unloading rail cars, they’re not loading vessels and the longshoremen aren’t crossing picket lines, so it becomes exponential,” he said.

If the strike had spanned more than a week, “the country elevator networks will back up. Farmers won’t be able to deliver grain. And if you can’t deliver grain, you don’t have cash flow.”

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Tags: grain, Canada, Railways, terminals, Vancouver, markets