CP Rail Strike Brings Greater Uncertainty to Canada's Mining Sector Amid Ongoing Shipping and Supply Chain Challenges

OTTAWA, ON, March 20, 2022 /CNW/ - Today, the Mining Association of Canada (MAC) expresses serious concern regarding the damaging effects the dispute and resulting strike between Canadian Pacific Railway (CP) and the Teamsters Canada Rail Conference is having on the mining sector and the broader Canadian economy.

"As the single largest industrial customer group of Canada's railways, the mining industry has seen firsthand how detrimental unpredictable work stoppages are to Canada's reputation as a reliable trading partner," said Pierre Gratton, MAC's President and CEO. "With global supply chain fluidity having been heavily strained in recent months due to sharp swings in consumer demand during the pandemic and disruptions to global shipping this strike could not come at a worse time."

Canada's strength in mining rests on its ability to produce and process minerals competitively and to transport products efficiently to and from domestic and international markets. These production, processing and transportation activities form the base that allows the industry to stay globally competitive.

"The mining industry is the Canadian rail system's most significant customer and in 2019, shipments of coal, iron ore, potash and other minerals and metals represented 52.5% of total Canadian rail freight volume," said Gratton. "The majority of this production volume is shipped to international customers, accounting for 21% ($102 billion) of the total value of Canada's total domestic exports in 2020, and consistently contributes positively to Canada's balance of trade. Work stoppages such as those occurring at present 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."

Over the last several years, Canada has witnessed an unprecedented level of disruption in its supply chain through labour actions by railway and port workers, civil disruption in the form of random and sporadic rail blockades and ongoing impacts stemming from COVID-19. The reliability of Canada's supply chain has deteriorated significantly over the past 36 months, due largely to the number and extent of both regional and national disruptions, including:

• Winter 2018, plagued by rail service disruptions
• Vancouver port and rail congestion in winter 2019
• Extensive Canadian National Rail strike in November 2019
• Crippling rail barricades in February and March 2020
• Port of Montreal strike in July 2020
• The tragic Lytton fires in July 2021

"MAC has been underscoring for years that the reliability of the supply chain is a significant determinant for mining industry investment given the volume of mineral and metal products transported in Canada," concluded Gratton. "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 dispute."

The mining industry is a major sector of Canada's economy, contributing $107 billion to the national GDP and is responsible for 19 percent of Canada's total domestic exports. Canada's mining sector employs 692,000 people directly and indirectly across the country. The industry is proportionally the largest private sector employer of Indigenous peoples in Canada and a major customer of Indigenous-owned businesses.

About MAC

The Mining Association of Canada is the national organization for the Canadian mining industry. Its members account for most of Canada's production of base and precious metals, uranium, diamonds, metallurgical coal, mined oil sands and industrial minerals and are actively engaged in mineral exploration, mining, smelting, refining and semi-fabrication. Please visit www.mining.ca. 

SOURCE Mining Association of Canada (MAC)

Cynthia Waldmeier, Senior Director, Communications and Public Affairs, the Mining Association of Canada, Phone: [phone] x225 or 613-894-2128 (cell), Email: [email protected]