Port of Montreal Strike Exacerbating Canadian Mining Sector's Supply Chain Woes

The Québec-based Port of Montreal, a critical hub for Canadian trade, is facing another labor strike that threatens to disrupt industries reliant on the movement of essential goods.

Longshore workers at the Viau and Maisonneuve Termont terminals initiated a three day strike early on Monday (September 30) morning, halting operations. The terminals handle over 40 percent of the port’s container traffic.

The strike, involving around 350 dockworkers, follows a contract dispute between the Maritime Employers Association (MEA) and the union representing the workers, which is affiliated with the Canadian Union of Public Employees.

One of the main grievances of the striking workers is the issue of unpredictable work schedules, and they have made demands for better conditions and higher wages. The MEA has expressed disappointment over the lack of resolution, which persists despite mediation efforts and an emergency hearing before the Canada Industrial Relations Board.

The work stoppage at the Port of Montreal is expected to continue until Thursday (October 3), but there is no guarantee that further strikes won’t occur if negotiations remain unresolved.

The mining industry in particular is feeling the impact of these disruptions. Montreal serves as a key gateway for the export and import of various minerals, metals and raw materials such as iron ore, nickel and gypsum.

These materials are essential for manufacturing processes and are transported to smelters and refineries in the region.

The current strike marks third job action taken at the port since 2020.

“Canada cannot afford another strike at any port across the country. The federal government should make ports an essential service, so they remain operational at all times. Small businesses and their employees should not be subjected to the uncertainty of strikes and lockouts in the nation's supply chain infrastructure,” said Jasmin Guenette, vice president national affairs at the Canadian Federation of Independent Business (CFIB).

In 2020, Montreal port workers were on the picket line for 12 days, which impacted 115,000 shipping containers.

At the time, a statement from the Mining Association of Canada (MAC) underscored the impact of the work stoppage and its potential to undermine Canada’s position as a reliable trading partner.

"Mining is a leading customer at the Port of Montreal. With supply chains already under strain, this stoppage is another hit to the industry's ability to move vital materials efficiently," said Pierre Gratton, the MAC's president and CEO.

He echoed this sentiment in August when faced with a short-lived rail strike in Canada.

"Over the last several years, Canada has witnessed an unprecedented level of disruption in its supply chain through labour actions by railway and port workers, the pandemic, and civil disruption in the form of random and sporadic rail blockades," he said. "The reliability and reputation of Canada’s supply chain continues to deteriorate."

Gratton further emphasized the importance of a stable supply chain to support industries critical to Canada’s economic recovery and the global shift toward green technologies, such as electric vehicles and renewable energy infrastructure.

In a broader context, uncertainty in Canada's supply chains may deter investment at a time when the sector needs capital to meet rising global demand for minerals and critical metals. The CFIB notes that the strike's impact could have ripple effects on small- and medium-sized enterprises that depend on imports and exports moving through the port.

“Small businesses and their employees should not be subjected to the uncertainty of strikes and lockouts in the nation's supply chain infrastructure,” said Guenette in the CFIB's statement.

Like the mining industry, many small businesses are pressing the federal government to declare ports an essential service, a move that would keep them operational during labor disputes.

With growing calls for intervention, federal authorities may be prompted to take more decisive action in preventing further economic fallout from labor disruptions at Canadian ports. However, as labor negotiations continue, the mining sector and other industries remain at the mercy of potential delays.

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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.