A strike by more than 7,000 union dockworkers at Canada’s West Coast ports could cut into demand for warehouses, North America's hottest commercial property sector, and disrupt the movement of goods across the continent.
Port workers set up picket lines on Canada Day, the third day of a strike called by the International Longshore and Warehouse Union Canada, after talks with the British Columbia Maritime Employers Association failed to reach agreement on a new contract.
The strike threatens to reignite pandemic-related supply chain disruptions and further erode demand for warehouses, just two weeks after West Coast port operators in the United States reached a tentative agreement with union dockworkers over similar wage issues.
The Canadian labor dispute could have a trickle-down affect on both industrial and retail real estate demand, Norm Taylor, head of real estate brokerage Newmark's operations in Canada, told CoStar News in a recent interview.
"Any disruption to port services is going to effect the supply chain," Taylor said. "Hopefully, the labor dispute will be short lived and corrected as quickly as possible."
About 99% of Canadian union port employees on the West Coast, who been working without a contract since the end of March, voted last month in favor of supporting a strike that would affect the country's two biggest Pacific ports at Vancouver and Prince Rupert.
'Significant And Immediate'
Canada's West Coast ports handle about $350 billion of cargo per year, representing more than 16% of Canada’s international trade, according to data from the Canadian Chamber of Commerce.
About two-thirds of shipping containers coming into the Port of Prince Rupert, located north of Vancouver near the Alaskan panhandle, are destined for the United States market by rail, Brian Friesen, the Prince Rupert Port Authority’s vice president of trade development and real estate, said in a statement.
In a statement, the Canadian Chamber of Commerce urged the the government "to immediately intervene in order to prevent further disruption to Canada’s supply chains and limit the impact on Canadians, who are bearing the cost of inflationary pressures.”
The strike "will have a significant and immediate impact on the livelihoods of Canadians and the health of Canadian businesses," according to the chamber's statement.
“The government should immediately recall Parliament to pass back-to-work legislation to protect the livelihoods of Canadian workers and the health of Canadian businesses affected by disruption to the more than $800 million worth of cargo flowing through West Coast ports every single day," Robin Guy, vice president and deputy leader of government relations of the chamber, said in the statement.
Newmark's Taylor said the ports of Vancouver and Prince Rupert service the movement of goods across British Columbia and the Canadian Prairies of western Canada east to Ontario, as well as Canadian exports coming from the east.