B.C. flooding could cause local food and gas shortages, widespread supply chain woes

Catastrophic flooding in British Columbia could result in consumer goods shortages, higher diesel and gasoline prices, and a further tear in Canada’s manufacturing supply chains at a time when global trade is already facing bottlenecks. record linked to the economic recovery from the COVID-19 pandemic. .

British Columbia Prime Minister John Horgan declared a state of emergency on Wednesday after flooding devastated the southern part of the province.

Landslides and landslides have stopped rail access to the port of Vancouver, Canada’s largest maritime hub, which handles $ 240 billion in freight trade a year. Torrential rains have also cut off major transportation routes between the Lower Mainland of British Columbia and the interior of the province.

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The climate emergency has also caused the temporary closure of the Trans Mountain Pipeline, which carries oil from Alberta to the west coast.

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While it is too early to estimate how the latest natural disaster could affect Canada’s GDP, “this will have a huge impact for all of Canada, but particularly western Canada,” Kent Fellows, professor of economics at the University of Calgary, Global News said.

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Supply chain disruptions could result in shortages of food and consumer goods, as well as manufacturing supplies, says Fellows. A prolonged shutdown of the Trans Mountain pipeline network could lead to a localized shortage of gasoline and diesel in British Columbia, it warns.

Although the floods have already triggered hoarding and panic buying in some parts of British Columbia, any real shortages would take at least a few days, if not weeks, to materialize, several experts told Global News.

Disruptions to key transportation routes mean that farmers in British Columbia’s Fraser Valley have to ditch perishable products like milk and eggs simply because there are no trucks to transport the products to market, says Sylvain Charlebois, director of the Laboratory of Agri-food analysis from Dalhousie University.

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“Unfortunately, there is a lot of waste,” he says.

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The phenomenon could affect the supply of eggs and dairy products in the province, including the Vancouver metropolitan area, in the coming weeks, it warns.

The effect of the floods will likely affect all manufacturing supply chains in Canada as well, says Andrew Wynn-Williams, British Columbia vice president of Canadian Manufacturers and Exporters (CME).

“The Lower Mainland is one of the largest manufacturing centers in the country,” he notes, adding that the region is currently isolated from the rest of Canada.

While some factories will work with existing inventories, “the reality is … that is not going to last long,” he adds.

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But the biggest impact on trade flows is related to the Port of Vancouver, a key gateway for imports from the US and the Asia-Pacific region and for Canadian commodity exports heading to China, says Fellows.

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While some of that volume is likely to be redirected through the Port of Prince Rupert and the US-Canada border, if necessary, US ports and supply chains are already dealing with extraordinary delays linked to domino effects. from the pandemic, Fellows says.

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Currently, the Port of Vancouver still has the capacity for incoming ships to anchor in local waters, says Robert Lewis-Manning, president of the Chamber of Shipping.

But “there is a limit to the space for the ships to anchor, and I suspect that we will probably reach that capacity in the next few days … and then the ships will start queuing offshore,” warns Lewis-Manning.

Significant delays in unloading ships through the port would affect inventory levels for some Canadian retailers, it adds.

“There is a potential impact on holiday shopping, and that is related to the type of our imports from the Asia Pacific region,” says Fellows, adding that consumer electronics could be among the product categories affected.

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British Columbia Floods: Prime Minister John Horgan Announces Provincial State of Emergency Due to Flooding

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Still, the extent to which flooding will further disrupt Canada’s supply chain depends on how quickly transportation routes, and rail lines in particular, are restored, it adds.

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Canadian Pacific Railway (CP) said operations between Spences Bridge and Falls Creek, BC, remain suspended after multiple track outages.

Canadian National Railway (CN) said in a statement that the emergency continues to affect northbound and eastbound traffic from Vancouver, as well as inbound traffic to Vancouver from east and north of Kamloops.

Neither CP nor CN provided a timeline of when service could resume.

with files from Abigail Bimman of Global News and Canadian Press

© 2021 Global News, a division of Corus Entertainment Inc.


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