Rail blockade fallout continues
Prime Minister Justin Trudeau’s cabinet is set to meet Thursday in hopes of resolving Canadian pipeline protests that have paralyzed the nation’s railways, threatening to slow the economy.
Environmental and indigenous-rights activists have blocked rail lines in several provinces, protesting the construction of TC Energy Corp.’s planned $6.6-billion Coastal GasLink pipeline. The pipeline is meant to ship natural gas to an LNG export facility under construction on the coast of British Columbia that is backed by Royal Dutch Shell Plc, PetroChina Co. and three other partners.
The blockades are beginning to pressure supplies of some commodities. Quebec is rationing propane with about a week of inventories. Stockpiles, which usually last for two to three weeks, are being rationed with schools and hospitals getting first priority, said Claude Potvin, press secretary for the minister of energy and natural resources.
Pressure is rising on the Trudeau government to do something to remove the blockade, though the prime minister has asked for patience.
“If the government is not going to uphold the rule of law in the country, who is? If the government is not going to assert the national interests on major projects for the country, who is?” Derek Burney, Canada’s former ambassador to the United States, said in an interview on BNN Bloomberg television Thursday. “I am just exasperated by the inaction and imbulence of government.”
As the demonstrations enter a third week, some see a drag on economic growth. Capital Economics analyst Stephen Brown reduced his first-quarter GDP forecast to 1.5 per cent from 1.8 per cent. Economists surveyed by Bloomberg forecast annualized growth of 1.4 per cent for the three months ending March 31.
The economic hit from the latest disruption “is likely to be more significant” than a rail strike at CN in November, Brown said in a report to investors. “We are penciling in a hit to GDP of 0.25 per cent from the blockades in February,” he said.
The blockades are disrupting shipments of agricultural products, hurting business for exporters. “As this thing persists, it’s going to have more and more of an impact on the Canadian economy and companies that use the rail system to conduct business,” Nutrien Ltd. chief executive officer Chuck Magro said Wednesday by phone.
Via Rail, Canada’s main intercity passenger rail company, said Wednesday it would temporarily suspend work for close to 1,000 employees. After canceling 400 trains last week and shutting down its eastern Canada operations, Canadian National Railway Co. said it will have to lay off about 450 workers.
“This situation is unacceptable in the fact that it is hitting Canadians so hard, facing layoffs and shortages,” Trudeau said Wednesday. “That is why we are doing everything we can to resolve this peacefully. We will exhaust every effort to resolve this peacefully.”
--With assistance from Stephen Wicary, Robert Tuttle and Jen Skerritt.