THE STANDING SENATE COMMITTEE ON TRANSPORT AND COMMUNICATIONS
EVIDENCE
OTTAWA, Tuesday, October 28, 2025
The Standing Senate Committee on Transport and Communications met with videoconference this day at 9 a.m. [ET] to examine and report on maintenance of transport services in the case of labour disruptions.
Senator Larry W. Smith (Chair) in the chair.
[English]
The Chair: Good morning. Senators, I call this meeting of the Standing Senate Committee on Transport and Communications to order.
Before we begin, please take a moment to review the cards placed on the tables in the committee room to familiarize yourself with the guidelines for preventing incidents related to sound feedback.
Please keep your earpiece away from all microphones at all times. Do not touch the microphones. Their activation and deactivation will be controlled by the console operator. Finally, avoid handling your earpiece when the microphone is activated. Earpieces must remain in your ears or be placed on the sticker provided for this purpose at each seat. Thank you all for your cooperation.
My name is Larry Smith. I am a senator from Quebec and the chair of the committee. Now I would like to ask my colleagues to introduce themselves.
Senator Simons: I’m Paula Simons. I represent Alberta and I come from Treaty 6 territory.
Senator Wilson: Duncan Wilson, British Columbia.
Senator Mohamed: Farah Mohamed, Ontario.
[Translation]
Senator Cormier: René Cormier, New Brunswick.
[English]
Senator Hay: Katherine Hay, Ontario.
Senator Lewis: Todd Lewis, Saskatchewan.
[Translation]
Senator Aucoin: Réjean Aucoin, Nova Scotia.
[English]
Senator Dasko: Donna Dasko, senator from Ontario.
The Chair: Thank you, colleagues. I would like to welcome everyone with us today as well as those listening to us online on sencanada.ca.
We are meeting today to begin our study on the maintenance of transport services in the case of labour disruptions.
I would now like to introduce our first panel of witnesses: Paul Champ, Lawyer, Champ & Associates; and Ian Lee, Assistant Professor, Sprott School of Business, Carleton University.
Thank you to you both for joining us today.
We will begin with opening remarks of approximately five minutes from our witnesses, which will be followed by a question-and-answer session with senators.
I will now invite Mr. Champ to give his opening remarks.
Paul Champ, Lawyer, Champ & Associates, as an individual: Good morning, chair and senators. Thank you for the invitation to present to you today on the issue that you’re studying. I’m a labour and constitutional lawyer, and I’ve represented individuals and trade unions for over 25 years before arbitrators, labour boards and courts, including the Supreme Court of Canada. I appeared before the Supreme Court of Canada in 2015 for the Saskatchewan Federation of Labour v. Saskatchewan judgment, which affirmed that the right to strike is protected by the Canadian Charter of Rights and Freedoms, in particular section 2(d) freedom of association.
The Supreme Court of Canada held in Saskatchewan Federation of Labour v. Saskatchewan that the right to collectively organize and withold labour in negotiations with the employer is a fundamental human right, and the state should not interfere with that right by using its power through legislation or regulation. The court also recognized that the historical right to strike and workers organizing collectively to improve their lives is fundamentally about personal dignity and autonomy because our work lives are an important aspect of our identity and our sense of self-worth.
The regulation of the right to strike goes back over 80 years in Canada. It was a historical compromise between the employers, the state and workers. The government agreed that they would protect the right to strike and in exchange workers and unions would agree that there would only be certain times or periods when they would strike. They agreed to the regulation of the right to strike. Typically, the window for striking is when a collective agreement has expired, and there are rules, requirements and labour legislation in all jurisdictions in Canada about when unions can strike. By lawful regulation, it means that there are criteria and limits enshrined in the statutes that are known ahead of time by unions and workers about when they can exercise that right to strike and when they cannot.
The key there is that workers and unions have agreed that they won’t strike over any workplace dispute. It will only be in certain conditions. Today, you are studying, I understand, section 87.4 of the Canada Labour Code, and that’s one of the exceptions to the right to strike: essential services agreements. All labour legislation in every jurisdiction in Canada has provisions like that where ahead of time, before a strike, unions and employers will discuss — and third parties can get involved too — about reaching an agreement about certain levels of workers that will continue to work notwithstanding a strike because they are delivering essential services. Typically, that’s for health and safety. Nurses are a classic. Hospitals are always covered by essential service workers. Some number of workers can go off work, but some must stay working and a variety of others.
For the language in section 87.4 of the Canada Labour Code — and I saw your terms of reference — the quote could be a little bit longer because you say, “. . . to prevent an immediate and serious danger to the safety or health of the public.” That’s part of the language, but before that, it also says, “. . . to the extent necessary . . . .” Every word in that phrase has been interpreted by the Canada Industrial Relations Board and the courts to recognize that the right to strike should be limited in the most minimal fashion possible and must be balanced against the right of the public and protection of the public when health and safety are at risk.
From the jurisprudence of the Canada Industrial Relations Board and the courts, what I can tell you about that provision is that its purpose is not to shield the public or others from economic consequences, inconvenience or personal difficulties. It is about an immediate danger to health or safety. When the boards look at that, they look at whether there are alternative services. Can managers step in to perform the services? Are there other ways that those services can be delivered? Some examples are air traffic controllers and airport firefighters. I worked on one a number of years ago involving Chalk River Laboratories, which produces medical isotopes. That’s nuclear medicine. Those are the kinds of things.
People here in Ottawa will know that once there was an effort to try to get an essential services order for public transit, but the board said “no.” Although it is really inconvenient and there might be economic consequences, people can find alternate means.
The final piece is section 107 of the Canada Labour Code. You’ve heard a lot about that in the last year and a half. Section 107 is general language that says the minister may order what he or she deems “expedient.” That’s not lawful. That’s not telling unions and workers when that power will be exercised. It doesn’t have what we call in law the principle of legality.
The principle of legality means I know what the rule is ahead of time and I can govern myself accordingly. Unions and workers and employers for that matter can’t know when a minister may invoke that power for whatever reason or whim that he or she may choose, so it is a problem. It is a serious problem with its increasing use. We submit it was never conceived to be used in that way.
The final thing to mention is back-to-work legislation. Typically, what we’ve seen in the history of Canada many times is that when a strike in any industry has gone on for a prolonged period and when it is starting to cause undue hardship to the rest of the community or maybe other third parties, a government can introduce and pass a bill ordering the end of the strike. There is public debate about it. Parliamentarians can debate it. Typically, in those bills, you will also see that the government will order binding arbitration. They will say, “Okay, we will order an end to the strike, but there will be binding arbitration to settle the terms by a third party.”
In exceptional circumstances, you’ll see governments order an agreement. That’s what we saw yesterday with the Alberta provincial government. Some of you may have seen the news today. Alberta has used back-to-work legislation where they ended the dispute and collective bargaining by ordering an agreement on those workers. Since the Saskatchewan Federation of Labour v. Saskatchewan case in 2015, courts have presumptively held that any back-to-work legislation is unconstitutional and certainly in the case of back-to-work legislation that orders an agreement. That’s why you have seen in that legislation, unfortunately, the provincial government has used the “notwithstanding” clause because they know it is unconstitutional.
Thank you, senators. I recognize my short time. Those are my remarks.
The Chair: Thank you, Mr. Champ. Thank you for respecting the time frame. You were right on.
I will now invite Professor Lee to give his opening remarks.
Ian Lee, Associate Professor, Sprott School of Business, Carleton University, as an individual: Thank you, chair. Just before the clock starts, I want to make a correction to the introduction. You introduced me as an assistant professor, but I have been an associate professor for 20 years. I just thought you’d want to update the record to be factually correct. I have three disclosures to make: First, I don’t belong or donate money to any political party nor do I allow any political party lawn signs to be installed on my lawn during elections. Second, I have taught the strategy and policy capstone course researching comparative corporation and industry competitiveness for 35 years. Third, I’ve been a member of the university faculty union at Carleton University for 38 years and was a member of the union’s Finance Committee for the last five years, until this past spring.
Over my entire career analyzing company and industry competitiveness — first as a banker for nine years, lending money, and then the last 35 years as a professor teaching the capstone course — I frequently had to address the labour relations framework and labour disruptions. In response to a 2012 strike by Air Canada workers and back-to-work legislation by Parliament, some pundits and analysts in the media claimed that the legislation was “unprecedented.” I decided to research the issue, as I knew from my 850-page PhD thesis that there had been numerous postal strikes in the 1960s, 1970s and 1980s. Some were illegal and some were before collective bargaining was allowed after 1967. So it was factually incorrect.
However, I found that no labour relations scholar or legal scholar had researched the quanta of strikes at the federal level. The empirical evidence of parliamentary records reveals that the Government of Canada intervened with back-to-work legislation for 34 strikes from 1950 to 2012, which is a period of 62 years. Restated, the Government of Canada intervened on average once every 18 months.
For the record, I am deeply grateful to the Parliamentary Research Branch of the Parliament of Canada, which produced the actual list of every bill at first, second and third reading in both the House and Senate as well as the date of Royal Assent that legislated the striking workers back to work. This research was published in 2012 in the Journal of Parliamentary and Political Law.
I updated my research in 2024 and determined that the totality of back-to-work bills tabled in Parliament from 1950 to 2024 had increased to a grand total of 37 back-to-work bills. However, in the last five years, the Government of Canada has developed a new policy response, which is section 107 of the Canada Labour Code, ordering striking workers back to work.
To me, from a policy perspective, this is a distinction without an ultimate difference, as both interventions achieve the same end: They bring the strike to an end. However, much more importantly, the pattern in the data — which is what I am always looking for as a comparative analyst — was stunning. In every instance from 1950 until today, the strikes that were legislated back to work occurred in the transportation sector.
Parliamentary or government intervention 44 times over 70 years by Liberal and Conservative governments revealed that Parliament found the disruptions to the economy and society to be unacceptably high. I don’t dispute the distinguished testimony of the fellow witness. I’m not a lawyer. I am just telling you what the record showed. The record reveals that the current model of labour dispute — as suggested to me — needs to be modernized.
The supply chain disruptions caused by periodic labour strikes or lockouts are extraordinarily damaging to the health and productivity of the economy, which is already in steep decline, due to the reliance of supply chains in every industry on the transportation sector. While this is true in every advanced economy, it is especially acute in Canada as the second-largest country in the world, spanning 8,800 kilometres east to west, with the lowest population density in the entire world at four people per square kilometre.
However, what is rarely discussed by labour relations scholars, union leaders or pundits are the massive social costs or social externalities imposed on millions of Canadians from coast to coast to coast who are dependent as employees or customers on the timely movement of billions of dollars of goods and people in the modern economy. Under the present labour relations regime in Canada, small bargaining units of 5,000 to 20,000 employees have the extraordinary power to shut down the entire supply chain and the entire economy of the eighth‑largest or ninth-largest economy in the world. However, under the current labour relations regime, only the Parliament of Canada can prevent or end work stoppage with back-to-work legislation or the imposition of binding arbitration.
My review that I published last year in 2024 concluded that the Parliament of Canada and Government of Canada face three broad policy options: First, maintain the status quo without any amendments to any legislation, ensuring — based on the record of almost three quarters of a century — that the Government of Canada will continue to intervene in labour disruptions in the transportation sector, as it has 44 times during the past three quarters of a century.
Second, amend the Canada Labour Code — if it is legally supportable — to designate critical occupations in railroads, ports, airports, airlines and related transportation sectors as essential and legislate an alternative dispute regime similar to the federal public sector, which imposes compulsory binding arbitration by an independent arbitrator. Third — and this is the one I recommended — revise the Canada Labour Code to adopt a similar system to the U.S. Railway Labor Act, which I did study, as that does not prohibit the right to strike for anyone. However, the model is designed to slow down collective bargaining at every step in the process to reduce the likelihood of a strike.
The U.S. railway model is the most efficacious, and it was developed under a progressive president called Franklin D. Roosevelt. It balances the right to strike with the overarching national objective of reducing strikes in the transportation sector to levels that are average with the rest of the economy, because transportation is an outlier and has been for quite some time.
In conclusion, with the election of the Carney government and its announced policy to transform Canada into an energy superpower and diversify trade away from our overdependence on an increasingly unreliable partner — the United States — the issue of unreliability and instability in the transportation sector must be addressed by reform. Thank you.
The Chair: Thank you, Professor Lee. We will now move on to questions from senators.
Senator Dasko: Witnesses, welcome to the Senate. We really appreciate the remarks from both of you. I want to start with Professor Lee. In your comments, you said that our approach needs to be modernized, and you have told us what you think is the best way to do that. Are you saying that this is your recommendation?
Mr. Lee: Yes.
Senator Dasko: In your view, how does this impact the right to strike that the courts have articulated in this country?
Mr. Lee: I am not a lawyer. I want to fully disclose that. However, I’m sure you can appreciate that as someone who has been in a union for 38 years, we do discuss this a lot — probably about every year and probably every month or two — in universities, which have a record of going on strike from time to time across Canada. However, my own university has never done so because we always completed successful negotiations.
To your point, I have read the 2015 Saskatchewan Federation of Labour v. Saskatchewan decision. I have read it three or four times, underlined it, highlighted it and so forth. I don’t dispute the authority of the Supreme Court. I don’t dispute that ruling whatsoever. I want to be clear: I’m not advocating for the elimination of the right to strike. Of course, it is a right in Canada. That has been decided definitively by law.
My understanding is that does not mean that anybody can go on strike at any time whenever they wish. I have lived in Ottawa all my life, and if you look at the Treasury Board — I realize we are talking about the private sector and railroads, but I’m just dealing with the numbers right now and the trends — it lists the totality of the numbers who are exempt from the right to strike. I don’t have it at my fingertips — apologies that I don’t — but I think it’s 20% of the entire labour force of the Government of Canada, which is over half a million people. This is, most obviously, the Canadian Armed Forces, the RCMP, borders, prison systems and so forth.
It is not accurate to say that if we reduce or make it more difficult to go on strike that we’ve lost the right to strike. Especially when you look at the record of strikes in transportation, it is profoundly higher than the rest of the economy in all of the different industries where they are unionized.
When you look at it on a comparative basis, it doesn’t seem to have affected people in other sectors. I don’t see a contradiction in putting requirements in front of collective bargaining to slow down the rush to judgment to go to a strike, imposing cooling-off periods, which is what the U.S. Railway Labor Act does.
Senator Dasko: Thank you. Mr. Champ, you’ve just heard your colleague mention that the government has intervened 44 times. In your view, should we keep the status quo in terms of the regulatory and legislative framework that we have right now? Do you think that’s the way to proceed? Or do you think there should be changes? What is your view of the current situation? Is there a problem that needs a legislative solution or regulatory solution?
Mr. Champ: The use of section 107 has been a problem in recent years. If you change the legislation and put up more barriers, making it harder for workers to strike — or in the case of section 107, on any given day whoever has the ear of the minister can order an end to a strike — it will lead to bigger labour disruptions. We were lucky that there was a settlement in the Air Canada strike. You saw that the workers and the union decided to defy it, and the union president said, “Put me in jail.”
This is something we haven’t seen in the last 15 or 20 years, but it used to be the case. In those 40 or so cases, I would like to see a more in-depth study on how many union leaders went to jail over those. I bet you that they did in many cases. We also didn’t hear from the professor about how long each strike lasted. How long did it go on before the back-to-work legislation was invoked? I think it is a bit more nuanced. Back-to-work legislation is a tricky thing. On the whole, it has been used when there was already a prolonged strike and there were many issues, and the parties — the union and the employer — can see it coming.
Overall, the regime we have in place now works. In my view, if you start disrupting it, you will see more labour disruptions, not fewer.
Senator Dasko: Thank you.
Senator Lewis: I have a question for Mr. Champ. Are you familiar with the U.S. legislation as it goes to rail, and what is your opinion of it?
Mr. Champ: No, I’m not familiar per se with what the professor was outlining. We do have provisions like that. Under the Canada Labour Code and other labour relations legislation, we do have different measures or steps that have to be taken before a union can go on strike. First of all, the collective agreement has to expire. They have to give a notice to bargain. Then before striking, they have to give a notice of conciliation.
They advise the Minister of Labour that things are not working out and that they want a conciliator. Then the minister will appoint a conciliator. I apologize that I forget the time period after that, but there is a time period after that in which there are efforts by the department and the minister to try to conciliate or bring the parties together before the open period for a strike can begin. Even then, they must give notice to the employer that as of this date, they may go on strike.
There are some measures already in place. Could there be more? Should there be more? I think there could be. The idea is to try to help the parties settle it together and negotiate together. What the Minister of Labour does now is there is almost always an industrial relations officer assigned to those parties. In some high-profile cases, we see that the minister will appoint a very high-profile person. For example, in the public service strike in B.C., they appointed Vince Ready, who is a very well-known mediator. Those are other measures that they can adopt. There is no reason why there can’t be legislation that provides other types of steps or regulatory measures to assist the parties in coming together before there is a breakdown.
Senator Lewis: Trade has changed both domestically and internationally over the last two decades, especially in terms of time deliveries and those kinds of things. When it comes to a railroader, for instance, it is suggested that for every day of a strike, it takes a week to recover. It is a big part of the U.S. legislation that a lot of work is done before people walk out. That’s the biggest issue from my province, which we see. Getting the strike started is the problem. It is not getting back to work and those kinds of things. That’s in the courts and whatever happens. But somehow or another, we have to get to a point where the last thing that happens is that people walk off the job when it comes to some of these transportation issues.
Mr. Champ: Yes, senator. Make no mistake, workers don’t want to go on strike. They don’t want to be off work and stop receiving a paycheque. Workers feel pain when they go on strike. Most unions have a strike fund, but it is approximately $20 a day. That’s not paying for groceries, rent, the mortgage or a trip to the hockey arena or whatever. The workers who go on strike feel pain too. They don’t want to go on strike, make no mistake.
Can there be more proactive measures to assist the parties in coming together? Can it be that the farmers’ collective is talking to the railways and saying, “Hey, I see your collective agreement is expiring next year. What the hell are you guys doing about it? We can’t afford a strike, and we know you don’t want a strike.” It may be other external parties negotiating things in their contracts with those companies that provide what they might view as critical services to their own company and then they say, “Hey, if you end up having a strike, you have to pay us.” Those are other options to protect the third parties. You put the pressure on the company or employer to do what they can to be fair to those workers because no one wants a strike.
Senator Wilson: My first question is for Professor Lee. In 2023, Employment and Social Development Canada conducted consultations to improve the process for maintaining operations under the Canada Labour Code. The final report states that employers have said that the Canada Labour Code should require considering public economic interest when determining what services should be maintained. More specifically, the following proposals were made by employers: first, establishing thresholds, such as $5 million in economic damage; second, developing a list of essential services; and third, establishing a list of organizations and companies whose activities are essential.
You’ve spoken about the high ratio of disputes that occur in the transportation sector. In relation to that, I’d be interested in your comments and observations on these comments by employers and whether we should maybe consider the transportation sector separately and distinct from these other areas.
Mr. Lee: Thank you very much. Yes, that’s an excellent question.
In answering that, I just want to point out something. I’m an empiricist, so all I do is look up government data, whether it’s from the Organisation for Economic Co-operation and Development, or OECD, or StatCan or whatever. According to the latest study that the OECD did across all the countries of the OECD, we are a huge outlier in workdays lost from industrial disputes. The OECD median was 14 days per million workers, and we’re at 75, so we’re miles above the national average in comparison to other countries.
Then, when you drop down methodologically speaking, inside Canada, the transportation sector is a huge outlier compared to the rest of the economy. There is something going on in transportation, and your question points to it.
The late Harold Innis, the great scholar at the University of Toronto, said you cannot understand the history of Canada without understanding the core centrality of transportation and communications. This is not just another industry like going shopping at Walmart or at some store. Transportation serves this vast, enormous country, and the proof is when you see an illegal strike — excuse me, I apologize — or a strike, you see mayors from every small town and mid-size town across the country as well as local councillors, members of Parliament and everybody up in arms because of the incredible impact it has on them personally. It has huge social externalities on all of us — all 40 million.
Of course, we’re not going to abolish the right to strike, but certainly, we’ve got to look at the fact that there is something in transportation that is causing many more disruptions than in the rest of the Canadian economy and vastly more when compared to the OECD average or any other OECD country.
Senator Wilson: I see what you’re saying about transport, but to me, it’s about the economic damage that happens and the power of that bargaining environment to shut down the economy that creates the reason, probably, why your data is as it is. Is it an economic damage number we should be looking at, or should we be focusing primarily on the supply chain?
Mr. Lee: Well, there is a third option. Yes, there is economic damage, but as was noted, that’s not the justification. I’m not going to get into the legal arguments; I’m not a lawyer, but I would argue that the social costs to communities across the country are even greater than the profound economic costs. The evidence is in the fact that you get people from small towns up in arms across this country as well as in villages and in mid-size towns, and it’s across the country. It isn’t something like the big business associations screaming at this. There are large numbers of ordinary Canadians who are negatively impacted, so I would argue a much more rigorous standard, which is the social costs to millions of ordinary Canadians who have become victims in these strikes that disrupt their economies and cause many of them to lose their jobs because the supply chains shut down and they get laid off since their companies don’t have the product to keep them going.
The Chair: You have 30 seconds.
Senator Wilson: That’s not long enough for me to ask my next question for Mr. Champ, so I will have to wait until the next round.
Senator Simons: Mr. Champ, I represent the province of Alberta. Yesterday was a very dark day for labour rights in Alberta. As you note, not only did the premier order teachers back to work, but she also pre-emptively invoked the “notwithstanding” clause and imposed a settlement on those teachers that had previously been rejected by almost 90% of the members of the union.
When I see that, I wonder what the implications are for jurisdictions outside of Alberta and what kind of precedent that might set, because in the cases that we’re talking about, they were referred to arbitration. There was not an attempt to impose a settlement that had previously been rejected by a union.
Since I have the advantage of having you here today, I’m wondering if you could extrapolate from what happened in Alberta last night as to what that could mean in the hands of a future Canadian federal government that might look to that as a precedent for what it could do federally. Would that be possible or is the federal government constrained in some way that a provincial government is not?
Mr. Champ: Yes, senator. We’ll see what’s going to happen. I think it will be an abject lesson here where you can observe what happens in Alberta over the next few days because it’s not just going to be that union. I’m almost certain you will see the rest of the labour movement rise up. It’s the same way: When the minister ordered the Air Canada flight attendants back to work, it was less than 48 hours before the Canadian Labour Congress held an emergency meeting and the president of the Canadian Labour Congress said all of labour was behind the Canadian Union of Public Employees, or CUPE.
We’ll see what happens. I think there will be widespread disruptions. Will workers or teachers go back? I don’t know. They may not. Are there going to be fines? Maybe there will be. Will there be people put in jail? Maybe there will be, but is this what we want to see in Canada?
There are other ways to resolve our differences. That’s the point. There are other ways to resolve our differences, and the lesson that I hope other jurisdictions in Canada learn from what’s going to happen in Alberta is let’s not touch that stove.
Senator Simons: I’m worried they may take the opposite lesson.
Professor Lee, I wanted to ask you: According to the Library of Parliament, since 2024, labour ministers have used their powers under section 107 of the Canada Labour Code eight times to intervene in labour disputes. You said in your opening comments that you didn’t think there was a difference between using section 107 and having back-to-work legislation in their functionality. As a parliamentarian, I can tell you that there is a difference for us because, for example, in 2018, when the postal workers were ordered back to work, there was actual legislation that we debated in the House and then debated in the Senate, and it was quite a heated, thoughtful debate in the Senate with quite a close vote in the end. When the government uses section 107, it leaps over that entire parliamentary process, and that’s why I have concerns about how easy it has become to use section 107.
I understand that for Canadians, these strikes are incredibly disruptive, and as an Albertan, I understand what it meant for Alberta’s agricultural producers not to have access to rail transport, but are you concerned at all — and I’ll ask you first and then Mr. Champ if there is time — about subverting the parliamentary process by jumping to section 107 as the “get out of jail free” card all the time?
Mr. Lee: It may surprise you, Senator Simons, but I agree with you completely. Since I’ve done a lot of media on strikes over the years because of this paper I’ve done, I’ve argued that the only proper way is through the democratic institution called Parliament.
I have great respect for members of Parliament and senators, and I know that you will debate it judiciously and appropriately, whereas section 107 is autocratic. It’s administrative fiat. Yes, I know the government is elected and the minister has been elected, but at the same time, it’s an executive decision that bypasses Parliament. If we’re going to invoke the draconian decision to order people back to work, surely it should be done with the full scrutiny of Parliament.
Senator Simons: Thank you. How about you, Mr. Champ?
Mr. Champ: I agree with the professor. When you have full scrutiny and debate in Parliament, that’s much better.
Section 107 wasn’t an open invitation for the minister at his or her whim to violate the rights of workers. No court, incidentally, has yet to weigh in on whether the use of section 107 is lawful or not in that manner. I’d like to see the legal opinion that advised the Liberal government they could use it in that way.
[Translation]
Senator Cormier: I am reflecting on the challenge of balancing the rights of workers and the needs of Canadians to have access to essential goods and services, but also the economic and social impacts of these bargaining challenges.
Mr. Lee, you spoke about the American slowdown collective bargaining model. What are the criteria and under what conditions is the American model effective in slowing down bargaining? What are the criteria and conditions? How do they apply in the Canadian context?
[English]
Mr. Lee: Thank you very much, Senator Cormier. There are two points: First, the Railway Labor Act only applies to railroads and airlines. It doesn’t apply to the entire labour situation. They passed it only because, way back in the day, they had a lot of strikes in that sector.
Second, I’m making some generalizations, but I did read it, and I read some fascinating analyses of it by the Congressional Budget Office and some other agencies of Congress.
What they’ve done is any time there is a breakdown or breaking off of negotiations or a breakdown of mediation — every time something changes during collective bargaining — they’ve imposed essentially a 90-day cooling-off period. I hope I’m accurate on my strikes. I’m doing this from memory, and I’m not a young person anymore, but I believe they’ve had two strikes in the last 50 years in railroads, so it had the effect of slowing everything down. They did not abandon the right to strike. What they’ve done is they’ve said, “Okay. There is a breakdown in discussions. You’ve broken off negotiations. Here is the 90-day cooling-off period.”
They have these endless cooling-off periods throughout the process, which means it’s very difficult, because they finally come to a deal is what happens. So that could be applied to our transportation sector.
Senator Cormier: If I may ask, what is happening during those 90 days? What is happening concretely during the 90 days?
Mr. Lee: I didn’t look it up, but I assume that they’re continuing to talk because they’re prohibited from striking. They’re not prohibited from talking to each other or discussing. They’re prohibited from going out on strike. They continue to discuss with each other and the time is there. They have a 90-day barrier, so to speak, before they can do anything. That is a lot of time for two parties to get back together and say, “Look, can we come to some kind of a deal?” which is what has happened over and over in that industry. Strikes are very rare.
[Translation]
Senator Cormier: Thank you.
In the Canadian National Railway Company case, the Canadian Industrial Relations Board, or CIRB, concluded that it had no discretion to refuse to implement the minister’s directions under section 107 or modify their terms.
Do you agree with CIRB when it says it does not have the discretionary power to refuse to implement the minister’s orders? If so, should it have that power? Is an amendment to the Canada Labour Code required?
[English]
Mr. Champ: Yes, senator. I can offer a response to that. I mean, that’s how the Canada Industrial Relations Board has interpreted it so far. A court has not reviewed that yet.
In my legal opinion — I’ll offer it here for free — I think a court isn’t going to even have to resort to the Constitution. The court isn’t going to have to say it’s unconstitutional. I think a court will conclude that section 107 wasn’t passed for that purpose. It wasn’t meant to be so sweeping as an open invitation for the minister to do whatever he or she wants to end a strike. Without even getting into the Charter, that’s my prediction of how it will be dealt with.
It’s unfortunate. I think that there are other measures that the government could consider instead of using it that way.
Think about it this way: We see in other countries that just because someone is elected, it doesn’t mean they can do anything. We have a rule of law, and when you have someone in power who has been elected and who just decides how they want to interpret and apply the laws or who they’re going to apply the law to or not, you start seeing the breakdown of democratic order. Honestly, not to overstate it, but that’s the problem with how section 107 has been used over the last couple of years.
Mr. Lee: This is something I’ve thought about a lot. When we do talk about designation of essential services, my research is — at least what I’ve read so far and have been able to discover so far — it’s only applied to the public sector, whether federal or provincial.
I’m throwing this to you and to legal scholars and lawyers like Mr. Champ: Does Parliament have the authority to designate certain occupations in the private sector such as a railroad or an airline or an airport?
We know that the Supreme Court accepts that you can designate in the public sector. There are very significant numbers of jobs, from emergency services to police to fire services to you name it, but can we designate in the private sector where there is enormous damage, as has occurred in the transportation sector, because it affects all of the people in the country due to the impact on supply chains and businesses and grocery stores and the ability to get food and on and on. If this isn’t essential, I don’t know what would qualify as essential.
I’ll leave that with you.
The Chair: Professor, thank you very much.
[Translation]
Senator Aucoin: I want to thank our witnesses for all the information they have provided to us.
Mr. Lee, your last comments were also extremely relevant.
For all those years, legislation had to be introduced in 44% of the cases. In my opinion, workers in the transportation sector know that, in addition to their right to strike, it has an impact on the public and on the social fabric of our communities. In my opinion, they are using this as a second unwritten power. They know the public is not happy. They are trying to use it to their benefit. I would like your comments on this.
Mr. Lee, I have another question after this.
[English]
Mr. Lee: I can respond quickly to your point. I want to correct one thing. You said 44%. I don’t want to mislead anyone on this distinguished committee. I did not look methodologically at “the total population of strikes” from 1950. I have no idea how many strikes were ever initiated in transportation from 1950 to 2012 or now.
What I did was the Parliamentary Research Branch looked up all the bills that had ever been tabled in the House of Commons or Senate from 1950 until 2012 and then 2024. That number, including the section 107 cases, now totals 44 interventions from then to now in that period of 70 years, which is roughly once every 18 months.
Mr. Champ: The area of law in which I study and work once used to be called “master and servant law.” We don’t use that terminology anymore. People aren’t servants. People aren’t slaves. People have rights to decide if they’re going to work or not work and where they’re going to work.
I don’t doubt that in different kinds of strikes, there are impacts on other people. But I would like to see other data, for example, in the U.S., where over 50 years, there were only two strikes. What is the data on the wages? Where have the wages gone for those individuals? I’d like to see the data on the wages of the transport industry versus other industries.
You have to take a look at it. I’m not entirely sure, respectfully, why — well, I know why this committee is looking at this now. It’s because it looks like we will have a few more strikes now than we’ve had typically over the last 20 years. That is because we had a big spike in inflation, and now it’s down and the collective agreements are off.
I can tell you who almost always loses there, senator. It’s the workers in terms of the wages. They’re always trying to negotiate so that they can at least keep the cost-of-living increase or, if they’re lucky, maybe do a little bit better. But if you look at those studies from 1990 regarding where the cost of living is going and where the workers in all industries are trying to keep up, they’re going down. It’s flatlining, senator.
Strikes are the only means. What else can a worker do other than continue to be a servant? Is that compatible with personal dignity? Is that compatible with self-fulfillment and wanting to improve your life and the lives of your family? It’s not, senator. These workers have a fundamental human right, and it’s the only power they have to try to improve their conditions of employment. All parliamentarians in the House and the Senate should be very careful when looking at measures to restrict that right.
[Translation]
Senator Aucoin: We saw what the U.S. did. Recognizing that the right to strike exists and should continue to exist, as parliamentarians, what other actions or tools could you suggest we study to create a balance between exercising the right to vote and the destruction of the entire supply chain throughout the country? This is what is essential: that the supply chain can continue. Do you have any comments on this subject?
[English]
Mr. Champ: If I may, I could add this, senator: It’s no doubt that our economies have changed. I’m not an economist. As the professor has noted a few times, he’s not a lawyer, and I’m not an economist, but I’ll offer a comment.
There is no doubt that supply chains have become fewer because companies have become more efficient at getting the product to people, whether it’s groceries or goods or your phone or whatnot. The fact that we have fewer supply chains means one thing: higher profits.
We can look at the value of Amazon. Everyone here, I’m sure, gets Amazon. Do you know how much those workers get paid? Try to organize those people and look at who is getting the money. We have a guy who is worth half a trillion dollars, and we’re here in a committee concerned about these people who are making $50,000 or $60,000 and whether they will be able to strike to improve their lives and their families’ lives.
We have to look with a little bigger lens. We’re talking about whether workers should have the right to strike and in what cases they should be restricted. Let’s look at the rest of the industry and look at the employer side and the company side. Where are the profits going? If they want, they can pay their workers more. We can start improving the conditions of workers so that they’re not working for less year after year. The right to strike is the only way they can do something about that.
Senator Hay: Thank you both. My question is for Professor Lee. Of your three options, your recommendation is revising the Canada Labour Code to be more similar to the U.S. Railway Labor Act. I’m curious on two fronts. One is simple. Is it beyond railways and airlines in your revision?
My second question is a little bit more complicated, I suppose. I appreciate the fundamental right to strike that is part of your revision. I’m curious around the slowdown of collective bargaining, or the cooling-off period. With long collective bargaining, there are impacts to other parts of the business. I heard you say something about endless cooling-off periods, potentially, in the U.S. where they have had two strikes in 50 years. I’m not sure if that’s positive or negative; it could be negative.
In the midst of long collective bargaining — and I’ve been the CEO of four collective bargaining units in the past — there are times of strife with uncertainty on both sides of the table throughout the business. I’m curious about the impacts to the total business on morale and on productivity, as you’re endlessly going into a cool-down, as well as on the slowdown of critical strategic directions for the company itself, which ultimately helps the economy and workers. There’s also the reputational impact to the company, to the workers, to the sector and to the country. How do you assess this in your revision?
Mr. Lee: Thank you very much for that fascinating question. I’ll answer the first one because it’s much easier, and the second will be much more difficult.
I know there have been parallels drawn to Europe from time to time, whether it’s the post office or transportation. These are terrible comparators. If you look at the density per square kilometre in the Netherlands, it is, I think, 650 people per square kilometre. Germany has about 700. Mackenzie King had a great line: Europe has not enough geography and way too many people, and we have way too much geography and not enough people. That just captures the difference.
We are absolutely and completely dependent on transportation in this country. If you’re in Halifax and your mother is tragically dying of cancer in Vancouver when there is a strike on, it does no good to say you can just take the car or hitchhike across Canada. We are completely dependent, and that’s why it is more acute in Canada for railroads and airlines. That’s why they’ve been legislated back to work multiple times. You can go and look at that list.
By the way, because Mr. Champ did bring it up, I was stunned at the rapidity of the response of Parliament each time. I’d have to look up some averages and do some number crunching, but most of the time, Parliament intervened very quickly within five to seven days. They would get it through quickly. You parliamentarians would put it through first, second and third reading in one or two days. I didn’t think it was possible for a bill to go through the House and the Senate and receive Royal Assent, literally, within two or three days. Obviously, Parliament took it very seriously.
To your second question, I will be very frank with you: I don’t know. But you’ve certainly put an idea in my head for doing more research to look at the impact on the companies and the unions because of the cooling-off periods. I will be very frank with you: I never looked that up and I never examined nor researched that possibility because I hadn’t thought of it. Because of your question, I will now go and do some research on that.
Senator Hay: Well done. Let me know.
Senator Mohamed: Picking up on your comments, Mr. Champ, that we’re seeing a trend of more strikes happening and, Mr. Lee, your comment that we are a country dependent on transportation, my question is asked in the spirit of Canada being a reliable partner in trading relationships where work stoppages impact our ability to deliver, particularly as we seek to diversify where and with whom we trade.
According to a 2020 analysis by the Centre for Future Work, Canada has the third-highest rate of working days lost to work stoppages among all OECD countries with comparable data between 2011 and 2016, behind France and Belgium. To what do you attribute the higher rate of labour disputes in this country or the relatively lower rate of disputes in our OECD partners?
Mr. Champ: I’m not sure I’m qualified to answer that one, senator. I would not be in a position to comment on why that’s the case. Actually, to be honest, I was quite surprised to hear that. And when I heard Professor Lee say there are more strikes in Canada than in Europe, I was a bit surprised by that.
Mr. Lee: Senator Mohamed, that was an excellent question. I’m not trying to point you in that direction, but if we are going to diversify our trade, that means trading away from the United States. We all understand that.
That means we’re going across in one of two directions. We are either going west or east — across the Pacific or across to Europe — and we have designated individual senators, parliamentarians and MPs who have said, “Let’s diversify to Europe. Let’s diversify to Asia.” That means supply chains in Canada — I will be as blunt as possible — will be more critical, not less critical. It’s not neutral. It will be putting additional pressure on the supply chains, especially the railroads of which there are two, essentially, Class 1 railroads. This issue will come up more frequently.
To your second question, I have puzzled over that because it is an interesting question. France is a highly unionized country, and they do have a record of strikes. My hypothesis, and I have not verified this with research, is that because of the very high densities in every European country, where there are 300, 400 or 500 people per square kilometre, there are multiple transportation systems. They have mass transit that we can only dream about in Canada because they have the densities. It could be there are alternatives available.
There are trucking firms all over Europe. There are railroads all over Europe, and I think that there are substitutes and competitors, whereas we are vastly more concentrated in Canada. We have exactly two railroads and three airlines. That means we have far fewer alternatives, so we are much more dependent. To use the argument of economic dependency, we are much more dependent which — I will be very frank — gives the unions much more leverage in a bargaining situation than the European unions have because there are so many alternatives to the company that they are bargaining with.
Senator Mohamed: Thank you. There is a tendency to think about strikes in a negative way because they impact people, but when you think about positive stuff that comes from strikes, do you have any reflections on how the idea of strikes and negotiations eventually influences private sector and non‑unionized industries? What have we learned from that which would impact those other two? Any reflections on that from either of you?
Mr. Champ: We do know that many of the improvements in working conditions that we have, whether that’s occupational health and safety, Employment Insurance, the Canada Pension Plan and all of those other broader benefits, were brought about because of pressure from labour.
Sometimes you hear people say, “Well, then everything is solved right now.” I don’t think so. Again, we see a big flattening of wages. People are further behind. People are having a harder time to do it. Some of us have adult kids who need two working parents to make a go of it now, rather than one working parent like when we were young. There is math that shows why that is.
We do know for a fact — and I’m sure Professor Lee will confirm — that the wages of unionized workers are much higher than people who are not unionized. Will that influence non‑unionized wages? Yes, I’m sure it does. Obviously, I’m not the economist, but I think that’s just a matter of common sense that it will have a positive impact on non-unionized workers’ wages.
Mr. Lee: Thank you, Senator Mohamed. That’s a good point because it allows me to put more data on the table, which I like to do, as you know.
This is StatCan data from 2023: Only 15% of the private sector in Canada are unionized. That means 85% of workers are not unionized. In the public sector, 75% are unionized. Overall, when you blend them out, 30% of Canadians are represented by a union, which means 70% are not. Going back to what I said about the social costs, yes, I am privileged because I am in an area that’s unionized and we have very good wages. I will be very frank. I’m not supposed to say that as a professor, but it is true. That’s the reality when you look at the comparative salaries.
The point I brought up earlier was that the costs of the strikes in transportation specifically fall on everybody. They don’t just fall on the major employers that we talk about. They fall on everyone who goes to the grocery stores and the stores are half‑stocked because the product is not coming through due to the just-in-time inventory systems we use across the total economy because inventory is expensive.
It really is disruptive. We saw that when the bridge was closed at Detroit. Something we have to consider are the social costs, not just the economic costs, to millions and millions of ordinary Canadians.
The Chair: Thank you, sir.
Maybe I could ask you one question where you might want to write a response to us. Section 87.4 of the Canada Labour Code says that during a strike or lockout, all parties must continue the supply of essential services to prevent “. . . immediate and serious danger to the safety or health of the public.”
Question: Do you think that removing the word “immediate” would provide the Canada Industrial Relations Board, or CIRB, more flexibility in considering a broader set of services that may not have an immediate effect on the health and safety of Canadians? I’m thinking, for example, of chlorine for water purification and sanitation.
We have another couple of minutes if you would like to give us a brief answer or if you could write us something, that would be most appreciated.
Mr. Lee: I can answer in about 20 seconds. First, I believe it will have an impact if we remove “immediate.” Second, we have to think more broadly about essential services as something that’s not only provided by government. You can have essential services provided by the private sector, dealing with the safety of the railroads for the locomotive engineer. I hope we can broaden our understanding of essential services so that we can look after those industries that are impacting everybody in the country when there is a disruption.
The Chair: Thank you, Professor Lee. We have reached the end of our time for this panel.
We thank you both, Professor Lee and Mr. Champ, for your participation here with us. If you want to add anything, Professor Lee or Mr. Champ, please do so in writing. You can send it to the clerk. If you have anything to send us back or if we didn’t necessarily ask the questions you wanted to answer, if you could get it back to us by November 11, 2025, that would be great. Thank you again.
I would now like to introduce our next panel: Colin Stacey, Director General, Strategy, National Supply Chain Office. He is also accompanied by officials who are available to answer any technical questions that may arise. If they are called to the table, I ask that they state their name and title before beginning their answer.
Thank you for joining us today. Mr. Stacey will be providing opening remarks of approximately five minutes, which will be followed by a question-and-answer session with senators. I now invite Mr. Stacey to give his opening remarks.
[Translation]
Colin Stacey, Director General, Strategy, National Supply Chain Office, Transports Canada: Good day. I am pleased to appear before the committee on behalf of Transport Canada.
I am accompanied today by Sonya Read, Director General, Marine Policy, and Tamara Rudge, Director General, Surface Transportation Policy.
I am speaking to you today from Vancouver, on the traditional unceded territory of the Musqueam, Squamish and Tsleil-Waututh nations.
[English]
Efficient, resilient and reliable supply chains are essential to our national objectives of trade growth and diversification, and they are also key to our productivity and competitiveness. Canada is highly reliant on transportation to move large quantities of goods across vast distances and complex geography both within our country and to and from our global trading partners.
The National Supply Chain Office works with industry, other levels of government and across the federal family to strengthen Canada’s transport and logistics systems. As part of our mandate, we work with our partners to mitigate the impacts of disruptions and support recovery. This has included natural disasters, such as last year’s wildfires, as well as work stoppages in the context of labour negotiations where there are major implications across industries and regions.
Frequently, there are minimal or no alternative forms of transport in the large-scale movement of goods, meaning that disruptions can have major impacts on multiple different users within Canada and abroad. Even the threat of a disruption can result in impacts. Operators need to begin planning before an event occurs. For example, railways stop moving certain commodities in advance so that equipment and cargo are secured and safe and not stranded where they shouldn’t be. Moreover, service recovery can take several days for each day of disruption. System users also need to make contingency arrangements to the extent possible, which is often costly.
When disruptions occur, the National Supply Chain Office focuses primarily on facilitating information sharing so that users and operators, as well as government decision makers, have a clear and common operating picture, which can inform decisions leading up to, during and while recovering from the event. In undertaking this work, we are cautious to ensure that we maintain an operational focus and do not interfere with the negotiating process, which is overseen by the Labour Program at Employment and Social Development Canada.
For example, we may bring together shippers and supply chain operators, provincial and territorial governments, multiple federal departments, et cetera, to share operational plans and impacts. These meetings happen at a cadence fit for the specific disruption and the stage it is at. We have frequently had meetings with close to 200 participants as part of our response to recent incidents.
Participants are asked to treat the information exchanged in confidence. We also engage directly with some organizations to focus on specific challenges and issues. For example, we may drill down on the impacts with regard to particular types of goods — such as medical supplies — or impacts on a specific region.
I’ll share some high-level examples of what we have heard with regard to the impacts of disruptions. I note that impacts usually depend on the extent and length of a disruption, timing and the nature of the commodity being moved.
The situation becomes more critical the longer the disruption goes on. Many goods, like feedstock for animals or chemicals, have limited alternative means of transport and cannot be stockpiled for long periods. Agri-food products and perishables have limited shelf lives.
Some commodities require timely delivery at particular points in the year, such as potash when it is required to fertilize fields or agricultural products following the harvest and when global demand is highest.
On the import side, Canadian manufacturers may be unable to obtain the materials needed to continue production, which could have a cascading effect on cross-border value chains in industries such as automotive manufacturing. Also, the delivery of essential pharmaceuticals and medical supplies manufactured outside Canada can be affected. These are a few examples. Beyond this, we hear from stakeholders that large-scale disruptions and uncertainty can affect Canada’s reputation as a global supplier. Foreign users of Canadian products express concerns when a disruption is likely.
Impacts during times of disruption are unavoidable, and transparent, timely access to authoritative operational information is important, especially in circumstances where it is not clear how long a disruption will last. We are here to provide that support.
[Translation]
The National Supply Chain Office will continue to work to improve the efficiency, resiliency and reliability of supply chains in Canada.
I will conclude my opening remarks here. We look forward to answering your questions. Thank you very much.
[English]
The Chair: Thank you, Mr. Stacey. We will move on to questions from senators.
Senator Dasko: Thank you, Mr. Stacey and your colleagues, for being here. You described the impacts of disruptions of supply chains and the kind of damage that has been done.
I want to ask you about any proposals you may have to change the legislation and regulations that are now in place. We have heard from other witnesses about the number of labour disruptions in the transportation sector. Canada seems to be an outlier in terms of the number of disruptions.
Can you articulate any changes that you feel are necessary? What are your views about section 107, for example, and how would you deal with the situation we are in right now? Do the status quo arrangements offer a way to deal with this, or do we need to do something else?
Mr. Stacey: Thank you, senator. I very much appreciate that question. I would like to underscore that I’m here as an official of the Department of Transport, and my focus is very much on transport and supply chains. We examine supply chains. We work with partners in terms of identifying challenges and seeking out the means to address them.
Having said that, I’m not an expert in labour policy or labour legislation or negotiating processes. I honestly feel that I’m not qualified to speak to that issue. The expertise and the lead on that issue is with our colleagues in Employment and Social Development Canada, and, unfortunately, I’m not in a position to respond in a way that would provide recommendations or advice in this matter. I wish I could be more helpful.
Senator Dasko: Thank you.
Senator Wilson: Welcome to our guests. My question is for the benefit of senators around the table who may not be as familiar with what happens on the ground during some of the disruptions that we’ve had in the last number of years.
Can the witnesses maybe describe the operational impacts and the backlogs that occur, as we saw in the West Coast ports in 2023 when we had that prolonged dispute? How long does it take to dig out of it? What happens on the marine side? Where does all the cargo go? Can you paint a picture of that situation for my colleagues around the table? I think that would be very helpful for the discussion.
Mr. Stacey: Obviously, when you’re talking about supply chains, you’re talking about very complex systems where there are multiple different users and multiple different commodities moving at any given point and in different forms, be it bulk or containers, et cetera. The impacts can be very different depending on who the shipper is and what commodity is being moved.
I will give you a specific example with regard to possible rail strikes or lockouts in both of our Class 1 operators last year. It is important to note that the users of the system and the operators need to start preparing well in advance if there is a significant possibility of a stoppage or a disruption of any sort, and if it is foreseeable.
In that case, several days in advance, before it’s possible for there to be a lockout or strike, the operators have to start doing what they call embargoing of specific services. That means they have to cease to offer certain services to make sure that, for example, goods or equipment are not left in places where they shouldn’t be. For example, several days in advance, they start off with stopping the movement of goods that are potentially dangerous, like chemical goods or toxic products. That affects the movement of those types of goods — for example, fuels or chemicals and the like.
At a point a little bit afterward, things that are part of the cold chain and things that are perishable have to stop moving as well. Again, that’s multiple days in advance of when the disruption could occur. Certain agricultural products and anything that is cold, such as meats and that sort of thing, as you can imagine, also must stop moving. Then, bit by bit, the system shuts down to the point where the actual stoppage could occur.
That’s in advance. You see an impact leading up to the event on all the different users of the system. It is affecting different users in different ways, affecting those who are shipping the goods but also those who might be receiving them.
It is my understanding, in that case, that some major international shipping lines also ceased receiving or shipping goods to Canada because they were uncertain what would happen at the other end. That also impacts the movement of goods, and, again, that’s in advance of when the stoppage would occur.
Obviously, during the actual work stoppage, it depends on the nature of the event. It could be a full work stoppage or something else. But, in that instance, again, that’s a major impact basically across all users of the system.
Once it’s over, there’s a long period of service recovery where the system is basically rebuilt bit by bit over time. In that instance, we heard numbers of possibly up to seven days of recovery time for each day of an actual stoppage. I hope that gives you an example of what can happen.
I will turn to my colleagues. Maybe Sonya Read on the marine side has something to add specifically with regard to ports.
Sonya Read, Director General, Marine Policy, Transport Canada: I would add a little bit of the flavour at ports related to what Mr. Stacey said. He gave information about one day of stoppage resulting in three to seven recovery days, depending on the nature of the strike. That is quite accurate from what we were hearing during the last couple of strikes.
At the ports, obviously it will vary by commodity, but we will often see shippers diverting in advance of the strike when they think there is a possibility of a strike. Depending on their supply chains and the flexibility they have in that, you may see some shippers starting to divert cargo to ports that are not impacted by the strike.
In the last Canadian West Coast strike, for example, we saw movement of cargo to American west coast ports. Some of that takes a very long time to recover. Some of those shipping pathways or shipping lines of services don’t necessarily go back to the port. It very much depends. Once they’re in a lane or in a supply chain, sometimes the recovery doesn’t happen immediately. It’s not that they shift immediately back. Sometimes they may stay over there for a very long time. You don’t always see a complete bounce back of those services.
The other thing we have noted during strikes or during labour disruptions is that you do get quite a backlog at the port in terms of the containers on deck, depending on the nature of the strike. Obviously, for the rail strike, at the port terminals, even though they were not on strike, we saw a big backlog of containers. Those containers cannot move off of the ports. Then the ships can’t off-load. Then you see an increased use of anchorages or diverting, which would be a particular experience for many of our West Coast ports. You see the ships effectively parked, waiting for the strike, if they weren’t able to divert in time.
Senator Lewis: We talk about the results of a strike and what happens. Do you do any analysis toward what will happen in the future? You spoke about what happened in the last strike. Do you guys offer any solutions, or do you look back at a strike and say this could have been done better in terms of logistics of what happens in the port or how the railways react, et cetera?
Mr. Stacey: Obviously, the management of the logistics on the ground is carried out by the actual operators of the system. Where we engage in particular, as I mentioned, is to help ensure that everyone has a common operating picture in terms of all of those users. These are very, very complex systems of supply chains that have multiple different entities depending on them. They must have a common operating picture in terms of, for example, which parts of the system are shut down at which point. What challenges are being seen at the ports in terms of backlogs of containers and backlogs of movement, et cetera?
Through that, we’re able to facilitate better decision making, including by entities that are shipping or having to deal with the products that they have on hand and are trying to figure out what to do during this particular situation.
I’d like to think that information is also helpful for them in terms of considering how they might respond in another situation, but we don’t have it if you want an organized process whereby we help to plan for a future event, particularly with regard to the labour side.
Senator Lewis: Do you do any analysis on future trade? For instance, now we’re going through a stage where we’ll probably be doing less trade with the United States. We’ll need railroads and marine more than we ever have for a lot of our export business. Have you done any analysis on that on what’s going to be needed in the future?
Mr. Stacey: This is a really important issue given the objectives of the government at the moment. What I would say is our department, in general, is very focused on examining the functioning of our system and our supply chains and considering what the different needs are in terms of being able to supply different markets in different directions. It is definitely something that is a priority and that we as an organization look at in general.
Senator Lewis: I suspect you get a lot of questions from shippers and users of the system. Do you ever spend much time talking to unions about what happens during a strike?
Mr. Stacey: When we’re in an actual event, what we’re looking at is how the different users of the system are deploying and where they’re deploying the things that they’re moving, such as their assets and their goods, and how they’re responding. The focus is actually on those users as well as the operators that are able to provide information as to what’s actually happening on the ground. That’s our primary focus in those instances.
Senator Lewis: Thank you.
Senator Simons: Mr. Stacey, I think Canadians woke up to the reality of the fragility of our supply chains in 2020 during the worst of the COVID crisis. Then in 2021, a massive storm wiped out the CN and CP Rail lines near Vancouver as well as the highways. As an Albertan, I can tell you that focused my attention rather extraordinarily on the importance of supply chains, but I want to try to put this in context.
When you’re looking at supply chain vulnerabilities, where do strikes rank in comparison to extreme weather events or pandemics or the trade policy of our closest neighbour in terms of the risk factors that put our supply chains in jeopardy?
Mr. Stacey: I don’t think I’m able to come up with some sort of comparator in terms of different incidents or different types of disruptions, but what is clear — and, senator, you point to this very well — is that we live in times of increasing uncertainty, which really underscores the importance of the resilience of our overall system.
Yes, in recent times, we have repeatedly seen disruptions of one sort or another that are quite outside the control of anyone, and we’ve engaged in a very similar way in terms of when you think of, for example, the tragic wildfires that affected our system and the town of Jasper last year. This had a major impact in terms of actually stopping the movement of rail through key lines serving both the ports of Prince Rupert and Vancouver.
We’re repeatedly seeing that this is part of the world that we live in, and we have to be prepared for it. We do have various mechanisms whereby we engage with stakeholders in different forums. We have what is called the western corridor logistics exchange where we work. Again, this does not allow us to foresee catastrophic events like that, but it’s where we work with stakeholders to examine what is happening in terms of the movement of goods through that very important western corridor. This is one example.
You’re right to point out that at a general point, I would say around the world there’s a recognition of increasing challenges that are facing supply chains, be it from natural disasters related to climate change or be it from geopolitical situations, et cetera. It’s a very important issue.
Senator Simons: We’ve had some strikes in the transportation sector. Those were resolved very quickly, relatively speaking, by government intervention. In the meantime, we have extraordinary risks to supply chains. I’ve talked about some West Coast and Alberta examples, but there is the Chignecto Isthmus that connects New Brunswick and Nova Scotia, which is a vital transportation link that is at threat of inundation. We have similar supply chain vulnerabilities all through the country.
We recently completed a major study of the resilience of the transportation sector to climate change. I understand that at a time when there are multiple risk factors, we want to manage the ones within our control and that a strike is particularly devastating if it comes at a time of other supply chain failure, but when we’re ranking the order of things that are a threat to the resilience of our supply chain, I wonder if strikes aren’t well down the list compared to other things that we need to deal with in terms of climate resilience, whether that’s from flooding or wildfires or storm surges or any number of other things.
Mr. Stacey: I am not familiar with any ranking exercise where that’s a concern.
Senator Simons: If you haven’t had a chance to look at our study, it’s excellent.
Mr. Stacey: I am familiar with it.
Senator Simons: The main title is Urgent, and that’s what we meant of it.
Mr. Stacey: I appreciate that. I am familiar with it. Thank you.
[Translation]
Senator Aucoin: I thank the witnesses.
In light of the strategic importance of rail and marine transportation to our economic resilience, I have two questions. You may not be able to fully respond to them. My first question is this: do you believe that the current regulatory and interprovincial coordination framework is sufficient to protect the country’s critical supply chains? Second, to what extent could disruptions in rail transport impact other transportation networks, such as provincial or private ones? Do you have any thoughts about what we as parliamentarians could do about this?
Mr. Stacey: I will start with the second question.
Railway systems and major ports are essential to the movement of goods. They are part of highly complex supply chains that are linked to many industries and other modes of transportation. A supply chain has links, multiple modes of transportation and operators who are working together to transport goods over very long distances between countries. A disruption in any part of this system, especially a critical part of the system such as a rail operator, impacts the entire network. We can think, for example, of the parts that belong to the provinces such as roads, of operators such as truckers, et cetera.
I do not know what can be done. Obviously, this is why it is important to work to improve and mitigate these situations when they arise, that is what we can do.
The goal of our National Supply Chain Office is to try to find ways to improve the movement of goods between different parts of the system.
In a crisis, we do what I described earlier. I do not know what Parliament could do to change this.
Could you repeat the first part of your question?
Senator Aucoin: Is the regulatory and intergovernmental coordination framework sufficient at present to prevent the worst disasters or disruptions?
Mr. Stacey: There is extensive collaboration at the highest levels of government. For example, the council of ministers responsible for transportation and highway safety works in close collaboration with the highest levels of government.
We are constantly striving to review and improve our policies. I guess there is always room for improvement.
Senator Aucoin: Thank you.
[English]
Senator Wilson: I have a follow-up question. Mr. Stacey described very well the preparation that takes place in the rail sector when it comes to preparing for a potential labour dispute. On the marine side, I believe there are similar things that happen. Senator Simons was trying to get a ranking of where labour disputes fall in the impact, if you will, but my understanding is it’s not just having labour disputes; it’s also having the threat of a labour dispute, which we have regularly or, frankly, all the time, and that can cause cargo diversions. I wonder, Ms. Read, if you could speak to what happens on the marine side with respect to that dynamic.
Ms. Read: Thank you, senator, for that question. As I noted in my previous response, indeed, once there is a threat of a dispute, a lot of the shippers and the system users will pay close attention to what the likelihood of that is. It’s important to keep those open lines of communication going. What you do see is that they start planning these shipments weeks in advance, so they will start making decisions, and my colleague Colin Stacey would have seen this as well in terms of the conversations and the collaboration with other stakeholders. They start making decisions many weeks in advance in terms of how they’re going to move a particular cargo.
What you see is that a diversion may start many weeks in advance in anticipation of the possibility of a strike and to avoid the possibility that it will be caught or stuck somewhere in the system, depending on the sensitivity of the cargo. They want to make sure they have the ability to deliver that.
With a rail strike, it looks a little bit different, obviously, than the port strike because the port strike will create a blockage at the intermodal part of the cargo movement, which is at that interface between the marine and the rail. Rail will look different because of how it interacts with the supply chain.
In terms of the planning for that, it’s a very similar process. You see that anticipatory movement of supply chains in advance of the strike. Some of those do not return. You don’t necessarily see a bounce back. I know that, for example, with respect to container volumes, what we saw were drops in container volumes at certain ports in anticipation of strikes, and some of those took quite a long time to rebound. Over the course of 2024, you saw a very slow return of some of those volumes.
Senator Wilson: If you’re Canadian Tire or even a large exporter like Canpotex or others, you have options in terms of where your cargo goes. I know, for example, that some big Canadian exporters build facilities in the United States because of the risk here in Canada to our supply chain. I know that Canadian Tire, for example, maintains multiple supply chains so that it’s easier for them to divert, but what do you do if you’re a small importer or exporter and you don’t have that level of sophistication? What happens in that situation?
Ms. Read: I wouldn’t be able to speak to individual shippers in the context of that. Obviously, it will depend. We know that in the context of previous strikes, there were, for example, a lot of containers that were stuck at a port, basically waiting to be moved, or stuck on a ship waiting to be off-loaded at a port, which would have a greater impact on those people or businesses and enterprises that aren’t able to divert supply chains in time or are more takers of the system.
Tamara Rudge, Director General, Surface Transportation Policy, Transport Canada: If I could add on that, it’s important, and one thing you’re highlighting, senator, is when we’re having these meetings about what the alternatives are, we’re told that they have no alternative. There is no plan B. Their goods will sit. They will lose those customers. We have that deterioration of Canada’s trading reputation, and sometimes, like Ms. Read was saying, those things don’t come back.
In terms of the question of the ranking, something that’s hard about these threats of labour disruption is there is a view from the customer side and our trading reputation that it is something we can prevent. When there is an atmospheric river, I think although customers are still frustrated and it has that same impact of closing down our supply chains, on the labour side there is an impression — and what we’re told by shippers — that this is very specific to Canada in a more continuous way and affects our ability to be a reliable trading partner, so those customers are making decisions to go elsewhere because they can’t manage the frequency of disruptions that they’re seeing here.
The Chair: Anything to add, Mr. Stacey?
Mr. Stacey: No. I think it’s been very well said. Thank you.
Senator Simons: I’m hoping that you were able to hear the testimony from Mr. Champ and Professor Lee earlier this morning. Professor Lee noted toward the end of his comments something that I think is germane to all of this, which is that Canada is vulnerable because we have so few options. We have exactly two long-track rail systems. We have short-track rail, but that’s for short distances. We have more than one port, but we don’t have that many ports, and there aren’t alternative unions with whom they can negotiate.
I wonder if you could speak more broadly about the challenges that Canada has with the unique vulnerability of having so few options, and as Professor Lee noted, for air, there’s Air Canada, WestJet and now Porter and, I guess, Flair. We should not leave Flair out, but people’s options to fly are limited as well. How vulnerable does that make our transportation supply chains when we don’t have that competitive pressure and those competitive options?
Mr. Stacey: Thank you, senator. As you said earlier, the COVID experience brought to the fore the degree of our reliance on transport systems, supply chains and these multi-faceted transport logistics systems as well as their potential vulnerability. When there are impediments to the movement of goods, it can have a very significant cascading effect across our industries and for goods flowing in both directions. It can also have an impact on those who rely on those, including our overseas customers.
There are no two ways about it. I can’t necessarily compare it to other countries. Obviously, every country has its challenges in that respect, but it was also well noted that we have a particular geography here. In many ways, the North presents its own unique challenges. We have these very long corridors across the country where there is room for challenges to happen, but regarding the transfer of goods between the different modes and operators as they move across the country, as they move across borders and as they connect with the world, they all have the possibility of adding challenges with regard to efficiency, productivity and the like. Everything you point to is germane in terms of why this issue is so extremely important.
Senator Simons: The other thing we haven’t really talked about yet today is working conditions. We’re responding as though the only reason strikes are happening is because of inflationary wage pressures, and I don’t think that’s the case. As we saw in the case of the Air Canada flight attendants, one of the issues that captured the public imagination is something I didn’t realize until I became a senator and started commuting by air twice a week. That issue is that flight attendants are not paid for their time on the ground. Their pay only starts when the door shuts. Many Canadians were shocked by the amount of unpaid hours that flight attendants were working.
Certainly, in meetings I’ve had with labour groups that represent people who work in the rail sector, I know that people have felt that their workloads have increased at a time when staff levels have gone down because of automation and that people are working very long hours. In fact, we’re having a great deal of difficulty getting people to train as railroad engineers or long‑haul truck drivers. These jobs are not considered desirable, and there are huge pressures just to obtain trained and qualified staff.
What do you say about the other end of things? How do we make these jobs — I don’t want to say more enticing. But what do we do to improve working conditions so that more people want to take on this work?
Mr. Stacey: Thanks for the question. I recognize that there is a challenge in our system in terms of having the appropriate qualified labour, and that’s an issue right across the economy. It’s not unique to transport, although it’s something that is an issue within our supply chain system. I’m not aware of any single analysis that summarizes all of the reasons why that exists, and, honestly, it’s probably something that would reside within another department, but I’m not aware of any silver bullet with regard to this issue or even what the full extent of the challenge actually is.
Senator Dasko: I have a quick follow-up question to Mr. Stacey. You mentioned that there is a committee of transport ministers. I assume those are provincial ministers. Can you share with us the views of this committee as to what they think about the federal approach? Do they have any direction to provide the federal government in terms of changes in the way the federal government deals with these issues? Is there a consensus of views among those ministers? Knowing Canada as we do, I would doubt it. In any case, is there any direction coming from this committee to the federal government in terms of ways to deal with those issues as they unfold?
Mr. Stacey: These issues are specifically focused on labour relations?
Senator Dasko: They are focused on labour disruptions, the disruption of supply chains, regulations and legislation that are in place, as well as the role of the federal government and how they deal with these issues. Is there any feedback that they’ve been able to provide, and can you share their views with us?
Mr. Stacey: There is a council of Ministers of Transport, and there is a process around that which also includes a council of deputy ministers. When they meet, they discuss multiple different issues, and they obviously focus on things that are a priority at the time. So it’s difficult for me to generalize in terms of what their perspective is on issues in general.
Certainly, my sense is that there is agreement in terms of the importance of addressing supply chain issues, but I can’t speak for the council of ministers in general in terms of their perspective on a wide range of issues. They really do deal with an array of issues, some of which fall under the purviews of the different levels of government.
Senator Dasko: Thank you.
The Chair: That wraps it up unless there are any other comments from Mr. Stacey, Ms. Read or Ms. Rudge. I would like to thank you all for meeting with us today, sharing your information with us and answering questions.
Before we adjourn, I would like to remind senators that our next meeting will take place tomorrow, Wednesday, October 29, at 6:45 p.m. Before closing the meeting, I’d like to thank the entire support team for this committee, those in the front of the room, those in the back of the room and those behind the scenes.
Thank you all for your work which contributes enormously to the success of our work as senators.
(The committee adjourned.)