'An emergency for the Canadian economy': Rail disruption hurting industries, groups say

The disruption in rail service caused by anti-pipeline protesters is having a significantimpact onsome Canadian industries, costing millions and damagingCanada'sreputation as a supplier of goods, industry leaders say.

"Every day that it goes on, the damage compounds," said Perrin Beatty, CEO of the Canadian Chamber of Commerce.

"It is damaging our international reputation as a reliable supplier. It is affecting our supply chains around the world."

Anti-pipelineprotesters who are demonstrating around therail lines near Belleville, Ont., and New Hazelton, B.C., have prompted CN Rail to temporarily shut down parts of its network, the railwaysaid in a statement Tuesday.There is currently no movementof any trainsfreight or passengerat both those locations, crippling the ability to move goods and facilitate trade.

Via Rail said Wednesday it has cancelled its Montreal-Toronto and Toronto-Ottawa routesuntil Friday. The passenger rail service said that 256 trains had been cancelled, impacting42,100 passengers.

Since last week, the Mohawks of Tyendinaga have been protesting in support of theWet'suwet'enhereditary chiefs, who opposeof the Coastal GasLink pipeline in B.C.The demonstrators are not blocking the railways but are too close to the tracks for the trains to pass, rail officials say.

In an openletter to federal TransportMinister Marc Garneau and Minister of Innovation, Science and Industry Navdeep Bains, Beatty wrote thathis organization is "deeply concerned about the damage to the Canadian economy" caused by therail disruption.

"A rail disruption of this magnitude constitutes an emergency for the Canadian economy," wrote Beatty, a former Conservative MP and cabinet minister, and one-time CEO of CBC.

Foods, grain, propane stopped

Beatty implored the governmentto bring an end to the disturbancethat he said hasseverely limited the movement of perishable foods and other consumer items, grain, construction materials and propane for Quebec and Atlantic Canada.

The stoppage has alsoaffected themovement of natural resources like timber, aluminum, coal and oil, while factories and mines may soon face difficult decisions about their ability to continue operations, he said.

"And the worry for Canada is if people say, well, Canada as a result of this isn't a reliable supplier, we need to go somewhere else," Beatty told CBC News.

As well, the rail supply chain isn't like a "tap you simply turn it on and off. Once it's shut down, it takes days to get it back up again," Beatty said.

Derek Nighbor, president and CEO of the Forest Products Association of Canada, said that for his industrywhich representsabout 10 per cent of total tonnage on railway lines every day that there is a disruption willtake two days to bounce back.

Costing forestry industry 'millions and millions'

The rail disruptionshave costCanada's wood, pulp and paper producers "millions and millionsof dollars" throughlost sales, lack of ability to deliver to customers, and increasing warehousing costs, Nighbor said.Mills are unable to get the raw materials they need to operate, andthey're not getting theempty rail cars that are needed to fill orders, he said.

"So you've got the issue with the raw materials coming in. You've got the issue of getting empty cars in and then you got issues in terms of getting stuff out," Nighbor said.

Grain businesses as wellarebeing significantly impacted, said Wade Sobkowich, executive director of the Western Grain Elevator Association.

"If the blockade were to lift today, it would have cost the grain industry over $10 million just over the last few days," he said.

The effects can be long-lasting, andendup pushing sales outside peak price periods, whichhurtsfarmers' bottom lines, he said.

"We have farmers who are needing to deliver product. They're needing to sell it into the handling system so that they can get paid, so that they can pay bills and keep cash flow going on their farms," he said.

When Canada is unable to to reliably supply product to customers, the country looks like "a banana republic," he said.

Brendan Marshall, vice-president ofthe Mining Association of Canada, said his industry relieson rail services for two reasons: bringing essential products to the site so that the mine can operate, andbringing mined products to the market.

Marshall said he has spokenwith companiesin British Columbia,the Prairies,Ontario and Quebec.

"And the messages that I'm hearing are the same. That is, these blockades are creating a total shutdown of service for the areas and traffic that moves on those lines," he said.

Companieshave curtailed production, have been running out of storage space and have lost sales. Marshall said.

"At the end of the day,you have threats to operational viability. You have significant and mounting economic losses for companies as well as the Canadian economy writ large," Marshall said.

He said the nextthreshold of losses "would be catastrophic" meaning operationsare no longer viable and are forced toshut down.

"My members' priority is avoiding that situation at all costs," Marshall said. "But they have limited options at their disposal. And the biggest thing causing this distress is disrupted rail service."