A group representing Canada’s mining industry is warning that rail strikes that caused major supply chain disruptions further harm Canada’s reputation of being a bad place to invest due to economic uncertainty.
The Mining Association of Canada expressed its “serious concern about the damaging impacts” the rail strike will have on investor’s perception of the country.
“The impacts of the latest disruption extend beyond the inability of mining companies to transport products to and from domestic and international customers and suppliers to Canada’s ambitions to supply minerals and metals to the world, particularly as the race for critical minerals intensifies,” said the MAC in a statement.
The associations’ members account for the majority of Canada’s production of “base and precious metals, uranium, diamonds, metallurgical coal and mined oil sands.”
The mining industry accounted for over half of the total freight volume transported by rail in Canada for over ten years and contributes $161 billion to the country’s GDP annually.
Additionally, it’s responsible for 21% of Canada’s total domestic exports, employing 694,000 people across the country.
“As the single largest industrial customer group of Canada’s railways, the mining sector has seen first-hand how detrimental unpredictable work stoppages are to Canada’s reputation as a reliable trading partner,” said MAC president and CEO Pierre Gratton.
“The urgent need for Canadian minerals and metals presents a generational opportunity, and we are in a race with our competitors to meet global demand.”
Gratton said that the CPKC and CN Rail strike “could not come at a worse time”as these companies must be able to rely on rail transport, both domestic and international, to competitively produce and process minerals on a global level.
“The mining industry is the Canadian rail system’s most significant customer, and the majority of our products are shipped to international customers. Work stoppages bring immense additional operational costs to businesses and reduce confidence in Canada as a destination for investment for supply-chain reliant businesses, such as mining,” added Gratton.
The MAC said Canada’s supply chain continues to lose reliability, negatively affecting industry investment.
“Canada can and must do better at creating a stable and predictable logistics supply chain that restores greater confidence in Canada’s reliability as a trading partner and the government should make every effort and use every tool at their disposal to address this unprecedented disruption. Failure to do so is an abdication of leadership and an abandonment of responsibility.”
Even as the rail strike begins to wrap up, the MAC’s sentiment is shared by other economists as well, who feel poor governance has led to this economic instability.
“It’s better late than never as they say, but Ottawa has finally realized the crucial role our railways play in Canada’s supply chains,” Renaud Brossard, vice-president of Communications at the Montreal Economic Institute told True North.
“Unfortunately, by banning the use of replacement workers starting in June of next year, the Trudeau government has ensured that future strikes are longer and more disruptive.”