Manitoba’s historic and future role in the international economy
During the crisp spring evening of Saturday, Mar. 19, in the late hours leading up to a midnight deadline to resolve a labour dispute, Teamsters Canada Rail Conference, the union representing about 16,000 rail transportation workers nationwide announced a lockout was being initiated by the Calgary-based Canadian Pacific Railway (CP) which promptly shut down operations.1
Unlike a strike where employees refuse to work, a lockout is set in motion by the employer. Although the CP rail employees returned to their jobs the following Tuesday with a final arbitration agreement reached, this work stoppage and the immediate threat of a shutdown of railway operations posed to farmers and manufacturers represents another addition to the list of factors perpetuating the global supply chain crisis.
Just two years ago, the COVID-19 pandemic caused global trade to initially falter as work became suspended through lockdowns before businesses could resume operations safely. Compounding this reduced capacity and slow recovery, 2021 did not hold back as covid variants, semiconductor chip and shipping container shortages, historic congestion at ports, and a chain reaction of disruptions continually exacerbated the crisis.
A recent member survey from Canadian Manufacturers & Exporters, a national organization that works with 2,500 leading companies found that “nine out of 10 Canadian manufacturers are encountering supply chain issues” and those surveyed said, “they have lost about $10.5 billion in sales because of disruptions in the supply chain and are now experiencing nearly $1 billion in increased costs.”2
Beyond the volatility of international markets, Canadians at home have been experiencing a relentless barrage of devastating floods, droughts, and wildfires that damage both critical infrastructure and the production of exportable commodities. Stores are dealing with higher prices from supply chains bottlenecks and inflation, labour shortages continue, and protestors temporarily blockaded the international border to Canada’s biggest trading partner, the United States.
Now, even war is putting new strains on global supply chains with the Russian invasion of Ukraine. Therefore, the risk and consequences of shutting down CP’s railways and operations are a bleak reminder of the crisis we are presently facing.
To better understand the opportunities for Manitoba to recover and thrive in an unpredictable future, we should stop to ask, “how did we get here?”
While it’s easy to point the finger at the spread of COVID-19, shortages, or Putin’s aggression, finding insights requires us to look past 2020 to an economic system and infrastructure set in motion much farther back in time.
For it was prior to the ceremonial driving of the “Last Spike” which marked the completion of the Canadian Pacific Railway in 1885 that Canada’s fate as an export economy was sealed. In which, wheat flowed east and manufactured goods moved west.
And by 1915 all three transcontinental railways ran through the rapidly expanding City of Winnipeg, the “Chicago of the North,” located at the centre of Canada’s geography and the nation’s wheat economy.
While the railways made the Prairie West’s prosperity dependent and indivisible from international markets and transport systems, this relationship was largely beneficial as Winnipeg became Canada’s third-largest city by 1921.3
Although the 1920s are characterized and remembered as the “Roaring Twenties”, the historical reality of Manitoba 100 years ago bears less resemblance to The Great Gatsby’s opulence and is more in common with the global supply crisis we face today.
Reflections of our modern problems include the Spanish Flu pandemic of 1918, the deadliest in history. Additionally, the hard times of the first half of the 1920s began with the North American economy entering a deep recession that lasted until 1924. A collapse caused by the international markets for wheat and beef prices to tumble from their peaks during World War I.4
We can find further similarities in the political discontent that climaxed in the forty-two-day Winnipeg General Strike of 1919. Furthermore, the impending environmental catastrophe of severe droughts that caused the complete international economic collapse which culminated as the Great Depression.
In these hard times, the Prairies were the most impacted region in Canada, in fact, more businesses failed between 1921-1923 than in any three-year period in the 1930s.5
While the prairie cities never regained the momentum of the pre-1914 boom of the interwar period; through innovation, diversification, and improving trade corridors they did recover from these tumultuous times.
In 1925 the Manitoba Pool grain elevators were incorporated, followed by the establishment of Western Canadian Airways, the province’s first pulp and paper mill at Pine Falls, and the Hudson’s Bay Company’s first downtown department store.6
Furthermore, the completion of the 627-mile Hudson Bay Railway in 1929—the trade corridor connecting The Pas with the Port of Churchill—Canada’s only deep-water arctic shipping port, also contributed to the economic recovery of the region.
Increasing transportation through Hudson Bay and the Northwestern Passages is welcome news but far from the only needed expansion to increase the flow of trade in and out of Canada.
Today we see similar developments in Manitoba that are helping Canada resolve another global supply chain crisis. For example, the Port of Churchill has closed until 2023 as the rail tracks leading to the docks are currently being upgraded.7
This small development could have a big impact on Manitoba’s economic recovery and will help bring its grain and other commodities closer to a number of new international markets, including Europe.
Increasing transportation through Hudson Bay and the Northwestern Passage is welcome news but far from the only needed expansion to increase the flow of trade in and out of Canada.
Transport Canada held the National Supply Chain Summit on Jan. 31 to bring industry and other supply chain partners together to address key challenges, strategies, and the next steps to mitigate logistical pressures.
Beyond the resolve we can find in knowing that our predecessors overcame similar obstacles, a better understanding of the economy the railways created provides valuable insights into the improvements that can be made to resolve the current global supply chain crisis
The Government of Canada has also been investing through this ministry’s National Trade Corridors Fund (NTCF) “to support the efficiency, reliability, and resiliency of Canada’s transportation infrastructure and supply chains.”
In December, an additional funding of $1.9 billion was announced and a new call for proposals under the NTCF was launched focused on increasing the fluidity of Canada’s supply chains.
Government spending on the Second World War effort also helped end the Great Depression,8 and the current federal government’s historic spending in response to the pandemic through programs like the NTCF and Canada’s COVID-19 Economic Response Plan could have a similar effect.
Especially when municipalities like the Altona & District Chamber of Commerce are helping businesses in their community overcome the challenges they face by running information campaigns to keep members informed of any available federal and provincial grants they qualify for.9
As much as a trope as it is to say that “history repeats itself,” the aphorism does hold a grain of truth. Beyond the resolve we can find in knowing that our predecessors overcame similar obstacles, a better understanding of the economy the railways created provides valuable insights into the improvements that can be made to resolve the current global supply chain crisis.
References
1Teamsters Canada Rail Conference. “Work Stoppage at Canadian Pacific.” News, Calgary, Mar. 19, 2022. http://www.teamstersrail.ca/220320.html
2Canadian Manufacturers & Exporters. “Manufacturing Survey: Nine Out of 10 Manufacturers Experiencing Supply Chain Disruptions.” Ottawa, Mar. 9, 2022. https://cme-mec.ca/blog/manufacturing-survey-nine-out-of-ten-manufacturers-experiencing-supply-chain-disruptions/
3Thompson, John Herd. Forging the Prairie West. Oxford University Press Canada. Don Mills, Ontario: 1998, pp. 86.
4,5 Thompson, Forging the Prairie West, pp. 111.
6Manitoba Historical Society. “MHS Features: Manitoba Time Line.” http://www.mhs.mb.ca/docs/features/timeline.shtml
7Hallick, Glen. “Port of Churchill Will Close for Two Years.” Western Investor, Nov. 12, 2021. https://www.westerninvestor.com/british-columbia/port-of-churchill-will-close-for-two-years-4751102
8Thompson, Forging the Prairie West, pp.137.
9Derksen, Candace and Pam Fedack. “Altona Chamber Begins Planning a Path Forward After Challenging 2021.” Pembina Valley Online, Mar. 21, 2022.
