Businesses warned of looming layoffs , lost revenue and a hit to Canada’s reputation, if the rail disruption had dragged on. A coalition of 39 industry associations wrote a letter to Prime Minister Justin Trudeau on February 18, calling on him to “work urgently” with First Nations and police to bring the blockade to a peaceful end.

While the members said they share the government’s commitment to reconciliation with Indigenous groups, the blockades “inflict serious damage on the economy, leaving countless middle-class jobs at risk, many of them in industries that must get their goods, parts, and ingredients to and from market by rail.”

“In addition to disrupting domestic and global supply chains, the blockades undermine Canada’s reputation as a dependable partner in international trade,” they said in the letter.

The rail blockades sprung up on Feb. 6 as Indigenous groups and activists across the country protested in solidarity with the hereditary Wet’suwet’en chiefs that are opposed the Coastal GasLink project in British Columbia. The hereditary chiefs oppose the pipeline through their traditional territory, though it’s received approval from elected band councils.

Meanwhile, the national chief of the Assembly of First Nations called for calm and constructive dialogue to ease tensions. National Chief Perry Bellegarde said governments and industry need to give the time and space to work with the Wet’suwet’en.

“We say we want to de-escalate and we want dialogue,” he said. “And I say our people are taking action because they want to see action — and when they see positive action by the key players, when they see a commitment to real dialogue to address this difficult situation, people will respond in a positive way.”

The rail stoppages has forced Via Rail and Canadian National to halt its operations for more than a week, bringing a key artery of Canadian transportation infrastructure to a halt. On February 18, Via Rail said it’s preparing to resume part of its passenger rail service.

Many businesses executives are already counting the cost of the rail paralysis. “We’ve talked to a number of members here in Ontario and many of them said if (the blockades) extend into that two-week range, most companies will have to start temporary layoffs and cutting shifts, because we just don’t have the inventory,” Dennis Darby, CEO of Canadian Manufacturers and Exporters said during a press conference in Toronto on February 18.

Other industry executives underscored the need to get infrastructure projects built in the country. “It hurts, because it suggests you can’t get anything done in Canada,” Steve Laut, executive vice-chairman of Canadian Natural Resources Ltd., told the National Post in an interview on Feburary 18. “And it’s hurting investment across the board.”

“It’s about the pipelines, but it’s also not about the pipelines — it’s about a number of other issues that Canadians have not addressed for a long time.”

Agriculture industry groups have also warned that recent blockades would deepen the financial pain felt by farmers after a dismal harvesting season. “These new blockades are once again hampering the ability for farmers to get their products to port, especially those in Western Canada,” the Canadian Federation of Agriculture said in a written statement on February 18.

Finance Minister Bill Morneau, who is preparing to release the federal budget in coming weeks, has already warned that the spread of the coronavirus could weaken economic output. Slumping Canadian manufacturing sales in December could add to those woes, while blockades threaten to further depress business investment.

Nathan Janzen, senior economist at RBC Economics, said that the blockades may result in a two or three tenths of a percent drop in the first quarter GDP, with an expected reversal in the second quarter.

However, with large disruptions such as strikes, the manufacturing industry usually experiences a “significant” bounce back. “You’re delaying activity but not losing it altogether in a lot of cases,” he said.

CME’s Darby hopes that the government can reverse the declines in Canada’s industrial economy. “I hope very strongly that the government will be able to come up with a long-term solution. It’s not about necessarily just solving this issue today about this particular blockade. It’s about how to give manufacturers, or any industry, predictability.”

The right to protest is “part of the Canadian history,” but the government must step in because the protests are “hurting our economy,” he said.

Source: Financial Post