In 2023, the Canadian commercial transportation industry witnessed everything from strikes at ports in British Columbia to protests from truck drivers fighting for unpaid wages to one of the biggest railroad mergers in North American history.
With 2023 coming to an end, FreightWaves has compiled the five biggest stories that shaped the Canadian transportation industry this year.
Canadian Pacific’s $31 billion acquisition of Kansas City Southern approved by regulators
The Surface Transportation Board approved Canadian Pacific’s plans to merge with Kansas City Southern in March, with the two Class I railroads combining to create a freight rail system linking all of North America.
Shareholders of CP and KCS approved the $31 billion merger in December 2021. The rail merger is one of the largest over the last several decades. Southern Pacific and Union Pacific railroads completed a $5.4 billion merger in 1996 that created the largest railroad network in the U.S. at the time.
The merged company, known as CPKC, aims to shift approximately 64,000 truckloads annually from North America’s roads to rail. CPKC offers single-line rail options facilitating the flow of goods among Canada, the U.S. and Mexico.
“CPKC is the only railway connecting North America and has unrivaled port access on coasts around the continent, from Vancouver to Atlantic Canada to the Gulf of Mexico to the Port of Lazaro Cardenas on Mexico’s Pacific coast,” CPKC said in a news release.
After the merger was finalized, CPKC quickly announced several more partnerships, including agreements with Schneider National and Knight-Swift Transportation for intermodal services using the company’s Mexico Midwest Express daily premium single-line intermodal rail service.
Other Class I railways announced similar north-south freight railway partnerships following the CPKC merger, such as Canadian National, Union Pacific and Ferromex.
CN is also partnering with maritime and logistics services company Crowley to provide integrated rail and ocean service from Mexico, to the U.S. Midwest and Canada via the Port of Mobile in Alabama.
Dockworkers at Canada’s West Coast ports launch strike
On July 1, more than 7,400 dockworkers represented by the International Longshore and Warehouse Union in Canada went on strike after negotiations with the British Columbia Maritime Employers Association (BCMEA) failed to reach a new labor contract.
The strike, which lasted about a month, disrupted container traffic at two of Canada’s busiest ports in Vancouver and Prince Rupert, key export gateways for the country. The contract dispute also paralyzed logistics operations and supply chains across Canada and the U.S.
Some $12 billion in freight was stranded off Canada’s coast during the work stoppage, according to CNBC. CPKC also reported that it lost about $80 million in revenue from the strike.
ILWU members were seeking wage increases, an end to ports contracting out work and job protection against the effects of automation.
BCMEA and ILWU Canada eventually negotiated a new labor contract on Aug. 3, but the impact of the strike was felt throughout the rest of the year.
Canadian trucking officials call for an end to Driver Inc. ‘scam’
Top officials in the country’s commercial transportation industry came together in May to call on the federal government to crack down on a tax-avoidance business model known as Driver Inc.
The scheme involves a trucking company telling a driver who does not own a truck to register as a corporation and sell its driving services to the carrier, according to officials.
Canadian Trucking Alliance, Teamsters Canada, Quebec Trucking Association and several logistics operators said Driver Inc. is a tax scam. Employed by a growing number of companies, it uses misclassification of employees to avoid paying taxes and other withholdings.
“The trucking industry is facing an existential crisis due to a labor abuse and tax avoidance scheme,” Stephen Laskowski, president of the Canadian Trucking Alliance, said at a May 17 news conference. “We need the Canada Revenue Agency and the Labour Program to tackle these issues with the enforcement resources this crisis needs. We need substantial audits on carriers involved in the Driver Inc. scam.”
The Manitoba Trucking Association (MTA) said it’s estimated that Driver Inc. is costing the Canadian government as much as $1 billion annually.
In July, a group called Justice for Truck Drivers held a rally outside Toronto’s federal labor program office to bring attention to wage theft in the trucking industry. Justice for Truck Drivers includes 42 people who said collectively they are owed more than $300,000 in unpaid wages from several different carriers who allegedly were using the Driver Inc. model, according to workers’ advocates.
Canadian cities create laws to crack down on illegal truck parking
The communities of Caledon and Brampton continue to fight commercial transportation companies that they said are evading laws on parking and storage of trucks and equipment within city limits.
The two Toronto-area communities are located in the region of Peel, considered the heart of the trucking industry in the area. Peel is in Ontario, a province in east-central Canada that borders the U.S.
Approximately $1.8 billion worth of goods moves through Peel every day, carried by some 68,000 commercial vehicles, according to a 2019 study.
In Caledon, owners of over 56 properties have been charged with illegal truck parking and storage since 2020.
Caledon officials said they have identified over 180 properties with suspected illegal trucking operations in the town and that they intend to go after all of them. In 2021, Caledon created a land-use enforcement task force, which includes two dedicated officers.
In 2021, Caledon successfully litigated local construction firm Darzi Holdings Ltd., eventually resulting in the company receiving a $1 million fine for contempt of court.
“Our enforcement strategy has always tried to achieve compliance voluntarily by working with the landowners,” John DeCourcy, Caledon’s manager of municipal law enforcement, told FreightWaves. “Unfortunately, this does not occur, and we’re forced to try and achieve compliance through the courts.”
Canada adds millions in federal funding to train, recruit new truckers
The Canadian government announced $46 million to help train and find jobs for up to 2,600 new truckers and other supply chain industry workers earlier this year.
The funding went to the nonprofit Trucking Human Resources Canada’s Career ExpressWay Program, which will give participants training and on-the-job work experience to prepare them for a career in the trucking sector.
Canadian employers are seeking to fill more than 1 million job vacancies, with truck driver positions totaling 26,900 of those, according to a news release.
The Canadian Trucking Alliance forecasts that the country’s industry will have a shortage of 55,000 workers over the next several years.
The government has also opened up its Express Entry immigration program to truck drivers from other countries, allowing foreign truckers the opportunity to apply for permanent residency.
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