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Canada grinding to a halt as rail shut-down and protests intensify. What’s going on?

PortandTerminal.com, February 15, 2020

Canada’s retailers and manufacturers are braced for shutdowns and dwindling supplies as demonstrators block ports and rail lines, bringing much of the country’s rail-freight network to a halt. Why?

HALIFAX, NOVA SCOTIA – Canada’s economy risks grinding slowly to a halt as its all-important rail lines remain largely shut in strategic points across the country.

On Thursday, CN Rail announced evening it was stopping all of its trans-continental trains in Eastern Canada. Meanwhile, Via Rail has shut down its passenger service across most of the country. Canada lives and dies by its rail system so this is a very big deal.

READ: Canada’s train system shut down nationally by ongoing protests

A prolonged shutdown could have devastating consequences for the country’s economy. CN moves more than $250 billion a year in goods across its transcontinental network. Simply put, Canada’s ports stop functioning without CN rail being up and running.

Already there is talk about companies in Eastern Canada running out of propane fuel required to run their operations as soon as Sunday or Monday.

What’s going on?

Why are the railways in Canada shut down?

The issue began with a valid complaint and the ensuing protest brought on out of frustration by the Wetʼsuwetʼen, an Indigenous people in Canada. The issue has expanded from that small flicker into a national firestorm.

The Wet’suwet’en are a First Nations people who live in British Columbia on Canada’s west coast. They oppose the construction of a gas pipeline through their traditional territory in northern British Columbia. The $US 5-billion, 400-mile pipeline is intended to carry gas from northeastern B.C. to a massive LNG export plant being built near Kitimat.

Artist's rendering of a LNG export plant being built near Kitimat in British Columbia
Artist’s rendering of the LNG export plant being built near Kitimat in British Columbia

The nation’s hereditary chiefs have repeatedly said they do not want a pipeline. Canada’s Prime Minister Justin Trudeau’s government though says that it wants the pipeline and that it will “invigorate natural gas exports in British Columbia”.

READ: Protests and train derailments punch Canada’s oil patch where it hurts

To make their voices heard, the Wet’suwet’in started setting up rail blockades and protests against the pipeline’s construction on their lands. Their protests have quickly snowballed and travelled across the country as other First Nations people and their supporters demonstrate against the pipeline’s construction too.

But now the protests are more than what they started out as. The protests are now morphing and growing into an expression of a much broader discontent with the Canadian government’s actions and mixed signals on climate change and decarbonization.

What’s the impact so far?

Canada is the world’s second-largest country in size and relies heavily on its rail system to help it function across its vast distances. Already the rail blockades have cut off crude-by-rail shipments to three Eastern refineries that account for about a third of the country’s refining capacity.

Infographic showing a map of Canada highlighting where oil is produced vs where it is needed

Propane is a critical fuel source in Eastern Canada. In rail dependant Eastern Canada, up to 85 per cent of propane arrives in the Maritime provinces by railcar and that supply is already running out, said Nathalie St. Pierre, president of the Canadian Propane Association.

“We have just been told that we will run out of propane on Sunday,” said CEO Jean-Paul Deveau at Acadian Seaplant’s Halifax location. “For us, that is a major cost expense.”

The supply chains are going to fall down for all kinds of other products. Will we be able to ship our products to our customers that are located around the world?

Jean-Paul Deveau, CEO, Acadian Seaplant during interview with CBC

Propane suppliers in Nova Scotia have already had to put customers on rations in an effort to stretch the supply.

PortandTerminal.com reached out to Lane Farguson, Communications Director at the Port of Halifax on Friday to ask about the rail shutdown’s impact on port operations. “The Halifax Port Authority is working closely with CN Rail and terminal operators PSA Halifax and Ceres-Halifax to minimize the impact of rail disruptions on Port of Halifax operations. The Port of Halifax remains open” Farguson said.

But with no trains to load containers on, how long will that last? Sixty per cent of cargo moves in and out of the Port of Halifax via rail. And that rail is shut.

“The import cargo that’s coming in can’t be loaded onto rail and the longer this goes on, the more of it is going to pile up on the docks,” said Farguson. “And then on the export side, if we don’t have goods coming in, then there is not much to load up on the ships. We’re doing our best.”

The Port of Halifax didn’t bring this crisis upon themselves. But they along with companies and consumers in the Maritimes are having to cope as best they can with it.

What is the Canadian government saying?

Canadian Prime Minister, Justin Trudeau says that the disruptions must be resolved through dialogue

Amid pressure to end Indigenous protest blockades of vital Canadian rail links, Prime Minister Justin Trudeau said the disruptions must be resolved through dialogue, not by ordering in the police.

Trudeau acknowledged the difficulties the blockades have caused for travellers and businesses, but he made it clear Friday the federal government had no plans to make the RCMP dismantle them.

“We are a country that recognizes the right to protest, but we are a country of the rule of law. And we will ensure that everything is done to resolve this through dialogue and constructive outcomes.”

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