Rail disruptions ‘overblown’ by rail companies, politicians says Parliamentary Budget Officer

Wet’suwet’en solidarity demonstrations that disrupted freight and passenger rail travel across the country were “not a big hit” to the economy, according to a new report by Parliamentary Budget Officer Yves Giroux.

“It was severe for those affected, of course. In the grand scheme of things, for the Canadian economy as whole – not a big impact,” Giroux told APTN News.

Giroux collected data from all rail companies affected by the blockades and used past stoppages of a similar nature – such as strikes – to estimate the impact to the Canadian economy, including businesses and consumers.

“Overall for the year as a whole, we expect GDP to be down by $275-million,” he said.

“That amounts to 0.01 per cent of GDP: what we technically call a blip.”

Businesses warned otherwise during the demonstrations, however.

On Feb. 24, the Canadian Chamber of Commerce told the government that “significant economic damage has been done” to “Canadian communities, businesses, workers and their families.”

Feb. 24 was the day that Ontario Provincial Police (OPP) dismantled a rail demonstration just off Tyendinaga Mohawk Territory. Ten were arrested and one person was sent to hospital.

“The damage to Canada’s reputation as a reliable supply chain partner and destination for foreign investment along with the severity of economic headwinds facing our country requires a serious, structured, and ongoing discussion between government and business,” said the chamber.

A week earlier, the chamber released an open letter “reinforcing the economic impact of the rail disruptions and calling for an immediate resumption of services.”

The letter was signed by “nearly 50 of the nation’s leading business associations,” said the chamber.

They sent it to Prime Minister Justin Trudeau.

“The damage inflicted on the Canadian economy and on the welfare of all our citizens mounts with each hour that these illegal disruptions are allowed to continue,” the letter said.

“Each additional day rail lines are disrupted requires three to four days for supply chains to recover.”

(Parliamentary Budget Officer Yves Giroux. Photo: Twitter)

Giroux’s findings contradict these statements – he said their reaction was overblown.

“Based on what we are seeing right now and the data we’ve gathered from VIA, CN, and CP, it was overblown.” The protests negatively affected the economy “but not as much as some pundits were pretending.”

“It’s mostly businesses and corporations” that were impacted, not consumers, he said.

“Their profits should be negatively affected by about $130-million, if I’m not mistaken, for the year as a whole; and compensation of employees – so, salaries lost – about $110-million, for the year as a whole.”

“It’s not big in the grand scheme of things. But of course, if you’re one of these affected employees, it’s significant. So, we’re talking about 1,000 employees in the first quarter. For them it’s a big impact but for the rest of Canadians, it’s barely noticeable.”

Giroux said “based on previous incidents of a similar nature, by May what’s recoverable should have been recovered.”

He added that some things – ship traffic diverted to other ports or commuters’ time spent navigating around the disruptions, for instance – can’t be recovered.

On multiple occasions, APTN asked VIA and CN to estimate the economic cost of the service disruptions and did not receive a response.

CN declined an interview request for this article.

“At this point, we have nothing to add,” wrote spokesperson Jonathan Abecassis in an email.

VIA Rail did not respond by publishing time.

As for the Chamber of Commerce:

“Normally we’d be on top of PBO reports, but we’re very member focussed amid COVID-19 right now,” said Phil Taylor, communications director at the Chamber of Commerce.

Read more:

CN announces shutdown of rail service in eastern Canada

Police clear rail protest near Tyendinaga Mohawk Territory

Giroux said a “workaround” deal brokered between CN and CP mitigated major economic impacts. The competing companies agreed to share tracks to avoid the Tyendinaga rail demonstration.

“If you remember, they had kept that agreement hush-hush, so kind of secret for obvious reasons. So I think that’s what contributed to minimizing the negative impacts to the extent it was possible – which is a good thing.”

Tyendinaga was the major site because it choked travel between Montreal and Toronto, one of Canada’s busiest rail corridors. Similar actions took place on Listuguj First Nation territory in Quebec, Kahnawake Mohawk Territory south of Montreal, and near New Hazelton, B.C.

The people at these sites said they were demonstrating solidarity with hereditary chiefs of the Wet’suwet’en Nation who oppose construction of the Coastal GasLink pipeline through the southern portion of their territory.

Opposing politicians also warned about the rail disruption’s economic effects. On Feb. 25, a day after the Tyendinaga arrests, outgoing Conservative leader Andrew Scheer said the demonstrations had brought the economy to its knees.

“We know that he [Trudeau] has taught protesters a valuable lesson,” Scheer said during question period.

“They can bring our economy to its knees and they can hold illegal blockades, holding up our rail traffic leading to lay-offs, and he will do absolutely nothing.”

On Mar.3, CN said it was calling back temporarily laid off employees.

As of Mar.7, VIA said most of its trains had resumed regular service and it was recalling most of its temporarily suspended workers.

Giroux offered his take on the impact of the protests.

“I think for protesters it’s probably, in my humble opinion, the best of both worlds, because they made their point very clear. Their point came across very loud and clear without affecting the economy very negatively.”

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2 thoughts on “Rail disruptions ‘overblown’ by rail companies, politicians says Parliamentary Budget Officer

  1. Yes but when there was a rail strike in December the railway workers were forced back to work because it was considered an essential service.While the blockades were in place it was never mentioned.

  2. What Mr Giroux fails to realize,is that the rail disruption should never have happened. It showed a complete lack of respect for our laws. And shows people that want to invest in our country that we let any protesters or group of foreign people to upset our way of life. So then we lost billions of future money due to these protests. And as an appointed minister in OUR government,he should know better.

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