Choke point: How the blockade movement has sent tremors across Canada’s economy and beyond
                                                                             
                                                                            Kevin Piper still operates a crane at the Port of Halifax, but with each passing day, there’s less and less work.
                                                                            
                                                                            This week, one of the port’s largest customers, New Jersey
–based  Atlantic Container Line (ACL), started diverting its ships to ports in  the United States after a rail blockade paralyzed much of Eastern  Canada, leaving valuable cargo stranded on the docks in Nova Scotia.
                                                                            
                                                                            “It’s amazing to me that this has gone on this long,” said Andrew  Abbott, ACL’s president. “We’ve always sold clients on the fact that  it’s easier (to ship) in Canada.”
                                                                            
                                                                            Earlier this month, what started as a protest of TC Energy Corp.’s  plans to build its Coastal GasLink pipeline through the traditional  territory of the Wet’suwet’en First Nation in rural British Columbia set  off a political and economic crisis that is wreaking havoc across the  nation as far away as Halifax.
                                                                            
                                                                            A clash between the Royal Canadian Mounted Police and protesters in  Wet’suwet’en territory inspired others to set up blockades elsewhere,  including one that started on Feb. 6 at a crucial choke point on a  Canadian National Railway line in Tyendinaga Mohawk Territory, about 200  kilometres east of Toronto. Blocking that one spot has apparently  managed 
to freeze freight traffic throughout almost all of Eastern Canada, and, in turn, hindering work at some of its ports.
                                                                            
                                                                            Canada’s rail traffic has been halted before, including at least  twice in the past year because of a derailment in February 2019 and a CN  labour strike in November. But the current crisis is entering its third  week, outlasting the previous incidents, and there are few signs  indicating that a resolution is just around the corner.
                                                                            
                                                                            As a result, the blockade is raising fresh questions about how easily  a small group of protesters in a remote part of Western Canada have  been able to paralyze the country’s economy, and highlighting concerns  about the vulnerability of the country’s infrastructure and its  reputation in the world as a reliable economic partner even if the  short-term economic fallout is small.
                                                                            
                                                                            Douglas Porter, chief economist at BMO Financial Group, said the  blockades could pose longer-term damages, but it’s difficult to quantify  the exact impacts of a rail stoppage.
                                                                            
                                                                            “I do have to wonder if it will do some lasting damage to Canada’s brand, especially if this is not a one-off event,” he said.
                                                                            
                                                                            The current blockades were sparked by the proposed construction of  the Coastal GasLink pipeline, which would link up to a liquefied natural  gas export terminal on the coast of British Columbia. Both the export  terminal and the pipeline have drawn foreign investment, from Royal  Dutch Shell and a consortium of investors led by U.S.-based  private-equity firm KKR & Co. Inc., respectively.
                                                                            
                                                                            Other energy pipelines, most notably the Trans Mountain Pipeline  expansion, which would twin an existing pipeline to carry oil from  Alberta to B.C.’s coast, have been slowed or stopped by protests and  litigation in the past. Major executives such as Don Lindsey, the chief  executive of Teck Resources Ltd., have said the status of such projects  will influence whether his company invests in new projects in Canada.
                                                                            
                                                                            Protests have occurred in the U.S., too, including one that started  in 2016 in North Dakota where protesters used sit-ins and lawsuits to  delay the construction of the Dakota Access Pipeline for months in hopes  that it would be rerouted. More recently, there have been similar  attempts in the northeastern U.S. to block the construction of gas  pipelines.
                                                                            
                                                                            But Jim Bookbinder, a professor at the University of Waterloo in  Ontario who studies transportation systems, said it’s important to  remember that Canada essentially has only two rail systems: one operated  by CN and another by Canadian Pacific Rail Ltd.
                                                                            
                                                                            “We have two nationwide railways, but only two,” he said. “In the  U.S., there’d be a half-dozen and it’d be pretty hard to blockade all of  them.”
                                                                            
                                                                            A CN spokesman declined to offer details, but said a blockade at just one spot affects the entire system.
                                                                            
                                                                            “It’s a network,” Olivier Quenneville said in an email. “If you clog a part, you clog the whole.”
                                                                            
                                                                            Bookbinder said that most businesses, even those dependent on a  functional rail system for supplies, can withstand the impacts of a  temporary stoppage in service because they may have excess inventory on  hand or they can sustain paying more for a new source for short periods.
                                                                            
                                                                            That adaptability is partly why economists aren’t sure about the macroeconomic impact of the current stoppages.
                                                                            
                                                                            “The question is how long it lasts?” said Nathan Janzen, a senior economist at RBC.
                                                                            
                                                                            Janzen noted that the CN labour strike for one week in November  inflicted only minimal damage on the economy. He estimates the strike  may have lowered Canadian gross domestic product in November by less  than one-tenth of a percentage point.
                                                                            
                                                                            The small effect is largely because rail traffic accelerates once the  stoppage clears up and the broader economy bounces back, even if some  businesses suffer more acutely from the disruption.
                                                                            
                                                                            For example, Saskatoon-based Nutrien Ltd., which mines potash in  Western Canada, said the CN strike in November lowered its third-quarter  earnings by $10 million, but that the current situation has had minimal  impact so far.
                                                                            
                                                                            “We don’t think it’s going to have an impact to our deliveries right  now,” Nutrien chief executive Chuck Magro told shareholders this week,  “but the reliability of the Canadian supply chain is becoming a concern  for us.”
                                                                            
                                                                            At the Port of Halifax, Abbott said the current “headache” may deter  his customers from using it in the future, preferring instead to route  goods through Baltimore and New York, and Piper, president of the  International Longshoreman’s Association of Halifax, is worried other  large customers, including the French shipper CMA CGM SA will follow  ACL’s lead. Some, he fears, may not come back.
                                                                            
                                                                            At the moment, new ships are still arriving in Halifax, but Piper  said most are not bringing full cargo loads, and he estimates that work  is down by 50 per cent.
                                                                            
                                                                            Some cargo is being off-loaded onto trucks, a more expensive and  slower way to move freight. There is also some cargo being loaded onto  rails, but it is unable to move far from the port, Piper said.
                                                                            
                                                                            Much of the cargo at the port, however, is just sitting around as  everyone hopes for a resolution that will enable rail traffic to  restart.
                                                                            
                                                                            The slowdown at the Port of Halifax comes at a particularly bad time:  the port had charted double-digit growth in traffic and added hundreds  of jobs in recent years by marketing itself as the fastest way to move  marine cargo into North America’s heartland.
                                                                            
                                                                            “Our niche is time-sensitive cargo,” Piper said. “The thing with  Halifax is, geographically, we’ve got an advantage over some of the  ports in the U.S., because when things come into our port, it dumps onto  a rail car and is on its way to Chicago before a ship could ever get to  New York, Baltimore or wherever.”
                                                                            
                                                                            Union workers have even staked their pensions — by agreeing to use  their funds to provide financial rebates to ships that call there — to  entice greater traffic to the port, according to Piper.
                                                                            
                                                                            “That money could go back to our pockets, but we realized there’s a  market here that we could entice shippers to go through Halifax,” he  said. “What we lose through our pension, we make up in ship traffic.”
                                                                            
                                                                            Of course, Halifax is not the only place in Canada that’s suffering.  Protests near Toronto, Montreal, Vancouver and other cities have slowed  traffic on various roads, and ports at times as well.
                                                                            
                                                                            The rail blockade in Ontario forced 
CN to shut down operations  throughout Eastern Canada, temporarily laying off about 450 workers. 
                                                                            
                                                                            Via Rail Canada Inc., which operates passenger trains on the same  tracks, 
said it is laying off 1,000 workers until the rail line re-opens and is deemed safe again.
                                                                            
                                                                            How a blockade in a single spot could affect ports hundreds or even  more than 1,000 kilometres away, in Montreal and Halifax, stumps many  economists and even rail experts, but it’s clearly something the  pipeline protestors have realized they can do.
                                                                            
                                                                            Although many of the protesters are driven by concerns about climate  change, the recent protests have an added layer of complexity because  they involve questions about Indigenous rights to traditional land.
                                                                            
                                                                            The proposed Coastal GasLink pipeline cuts through traditional  Wet’suwet’en land, which, like most of British Columbia, was never  officially ceded by First Nations to the Government of Canada. Within  the Wet’suwet’en community, there are factions that oppose and support  the project, and there are unresolved questions about who can speak for  the First Nations people.
                                                                            
                                                                            Drew Fagan, a professor at the University of Toronto’s Munk School of  Global Affairs and Public Policy, said the problem’s multiple layers —  the protest in B.C. is related to historical grievances held by  indigenous people as well as climate change — make it more intractable.
                                                                            
                                                                            “This is what we call a super-wicked problem,” he said. “We talk  about problems that are kind of squishy, not easily measurable,  politically controversial, entangled with other problems, with no clear  cause and no clear solution as wicked and this is super-wicked.”
                                                                            
                                                                        
business.financialpost.com/news/economy/choke-point-how-the-blockade-movement-has-sent-tremors-across-canadas-economy-and-beyond