CIFFA Statement on the National Supply Chain Task Force’s final report: Action, Collaboration, Transformation (ACT).

Background: The federal Minister of Transport and the Ministers of Agriculture and Agri-Food; Employment, Workforce Development and Disability Inclusion; Innovation, Science and Industry; Labour; and International Trade, Export Promotion, Small Business and Economic Development hosted the National Supply Chain Summit in January 2022 to stimulate dialogue with transportation supply chain stakeholders. The Summit focused on the ways in which Government and stakeholders could collaborate and act together to improve our supply chain’s resilience, address existing congestion and reliability challenges, and position Canada’s transportation supply chain to be domestically and globally competitive in the long-term.

On October 6, The National Supply Chain Task Force released its final report, titled: Action, Collaboration, Transformation (ACT). 

Over the course of 2022, the National Supply Chain Task Force engaged a broad range of organizations, stakeholders, and industry experts to get perspectives on priority actions to improve the competitiveness, efficiency, and resilience of Canada’s supply chain system.

CIFFA’s submitted input to the Task Force on July 28 and the details can be found here. 

CIFFA thanks the Task Force for the work that it has undertaken. We were pleased to review and comment on the final report. We look forward to working with the Transport Minister and department on further input in developing these actions.

We highlight and champion the following points and calls to action:

• Collaborative action will be required to create a supply chain system that is more agile, flexible, resilient, competitive and efficient than it is today, and to correct what has become a “fragmented, siloed approach” to supply chain.

• Government should immediately undertake actions to “unstick” the transportation supply chain. These include the following:
  • Establish a Supply Chain Office to unify the federal government’s responsibility/authority over transportation supply chain management across federal departments. Evaluating the effectiveness of investments made by programs such as the National Trade Corridors Fund to ensure sufficient ongoing resources are available for projects (“through the development of a long-term transportation supply chain strategy”) and infrastructure investments are aligned with national opportunities and strategies, including anticipating technological change. Working with industry to effectively manage the transportation supply chain, including data and information sharing as well as preparing for and encouraging the use of technologies that will improve the supply chain’s fluidity and resiliency.
  • Develop, implement and regularly renew a long-term, future-proof (30- to 50-year) transportation supply chain strategy. Rationale: Lack of strategic coordination has been a significant driver of the challenges facing the transportation supply chain. If not addressed, this will continue to inhibit Canada’s ability to resolve both longstanding and emerging issues for the benefit of the national public interest. A strategy is needed to provide a comprehensive response to current issues and to develop appropriate governance, planning and accountability for the long term.
  • Revise the mandate of the Canadian Transportation Agency and provide it with the independence, sufficient authority and commensurate funding needed to deliver on that mandate. Rationale: In a constrained competitive environment, transportation service providers have outsized market power and seek to maximize their financial performance, often without regard to the national public interest. Because Canada relies on the transportation network for its economic well-being, it must keep market forces in check. A critical component of an effective transportation supply chain is an independent quasi-judicial regulator, such as the CTA, which is responsible for ensuring the consistent functioning of Canada’s transportation system. In particular, the regulator should have the authority to address unfettered competition that negatively affects the national public interest
  • Protect corridors, border crossings and gateways from disruption and interruption to ensure unfettered access for commercial transportation modes and continuity of supply chain movement, through development of risk-mitigation strategies for three chief types of risks to our transportation supply chains: climate-related natural disasters, human-caused mischief and labour-dispute delays.
  • Investment and planning at a national level are required to ensure Canada’s transportation supply chain can withstand shocks and adjust to fluctuating demands and global trade dynamics.
  • The Government must intervene quickly and strategically in transportation supply chain disruptions that cannot be resolved by commercial operators. This may include using financial resources to create incentives, introducing penalties, or temporarily waiving regulatory and legal requirements that do not compromise safety. Current issues that require immediate intervention include alleviating port congestion and other bottlenecks, expanding access to labour, and increasing competitiveness. There are critical hot spots (such as congestion in the Pacific Gateway and the Port of Montreal) as well as areas of weakness (such as Northern transportation access) that require action today and an investment in longer term capacity to alleviate constraints.
  • Develop a transportation supply chain labour strategy.
  • Ensuring departmental mandates consider transportation supply chain impacts when developing legislation, regulations and policies.
  • Digitalize and create end-to-end supply chain visibility for efficiency, accountability, planning, investment and security. Rationale: Canada is behind in using technology to improve and modernize its transportation supply chain processes. An intense and urgent focus on digitalization is needed to compete internationally and become a global leader. A national transportation supply chain data strategy as well as a Government-led, industry-wide data-sharing commitment are needed to improve visibility, competitiveness, resiliency and agility
  • Engage the U.S. and the provinces/ territories to achieve reciprocal recognition of regulations, policies and processes to enhance supply chain competitiveness and productivity. Rationale: Regulations, standards and requirements imposed by different jurisdictions cause friction in the transportation supply chain. This contributes to lower productivity and higher costs, particularly when requirements are similar but not identical across jurisdictions. This is true among Canadian provinces/ territories as well as between Canada and the U.S., our largest trading partner.

Finally:

The lack of clear and cohesive federal leadership on Canada’s transportation supply chain creates a veil of uncertainty for industry where businesses cannot confidently plan and invest for the future. The gap in federal leadership is seen as a lack of prioritization of the growth, health and oversight of our supply chain.

Without a definitive path for the future growth of this complex economic system there is concern that this will challenge Canada’s reputation as a reliable trading partner and in turn reduce economic opportunities. In addition to a lack of direction, there is a lack of cohesion and communication across the various federal departments that touch on areas of the supply chain (e.g., labour, transportation, infrastructure, industry). The diffusion of efforts results in stakeholders having to navigate multiple layers of bureaucracy where jurisdiction is unclear.