Manufacturers are struggling to deliver products, industry associations are warning of the possible shortage of food, propane, and chlorine for water treatment, and mining companies are restricting production because indigenous groups and environmental activists continue to paralyze Canada’s transportation infrastructure.
Likewise, the crisis in the nation’s rail system is hitting at a particularly difficult time for the economy, already injured by the coronavirus and still recovering from an eight-day strike that closed CN operations in November. And it is that half of the Canadian exports move by rail to ports and then to world markets, and only CN moves $ 250 billion in goods annually.
Shortage of insight
The Parliamentary Budget Officer recently reduced fourth-quarter growth to 0.3 percent from 1.6 percent, citing strikes in the CN and General Motors strike. The projected growth for the first quarter was also subsequently reduced, to 1.5 percent from 1.8 percent, largely due to concerns about the impact of the current coronavirus outbreak.
For their part, retailers and food producers warned that a prolonged strike could lead to a shortage of groceries and household products on the shelves, and the “deterioration of fresh food.” While urban centers would not escape the impact, smaller communities would be particularly affected.
As in other sectors, companies were switching to an alternative transport that was already in short supply, including road transport, according to the statement. But for some goods, including bulk agricultural products, mining products, and hazardous chemicals, trains are the only way to move products. Chlorine to treat drinking water, jet fuel and chemicals used in the defrosting liquid depend, particularly on the railroad.
Meanwhile, some mining companies, which rely heavily on the railroad to send raw materials to their operations and bring products to the market, are experiencing serious interruptions, while others have completely interrupted their service.
Source: Naomi Powell, Emily Jackson and Julia Mastroianni | Financial Post
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