Opinion-Editorial

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Canada is looking beyond the United States for new customers — but its ports could hold those opportunities back.

As trade tensions push Canada to diversify its export markets, the value of new trade deals will ultimately depend on whether we can move exports quickly, reliably, and affordably. This will require drastic improvements at Canadian ports, which suffer from severe congestion.

The federal government has been consulting with industry about transportation and labour reforms, with legislation anticipated this fall. Reforms will be crucial to address the inefficiencies and bottlenecks plaguing Canada’s ports.

Port capacity constraints

As Canada and the United States implement tit-for-tat protectionist measures, the Carney government is searching for alternatives to the US market. Recent agreements include Indonesia, Ecuador, and United Arab Emirates, with negotiations continuing on new agreements with Philippines, Thailand, and Turkey.

However, we are producing more goods than we can ship to new customers. Sectors such as agriculture, oil and gas, mining, and manufacturing, continue to innovate, resulting in increasingly higher levels of production. As an example, from 2008–2017 agricultural exports grew by 5 per cent annually, reaching $65 billion in 2017. Production increased to the point that for 2024, agricultural product exports reached $100 billion in value. Mining production in 2021 was valued at $55 billion, an increase of 20 per cent from 2020 and 300 per cent higher than in 2002. In 2025, mineral exports rose by 6 per cent compared to 2024, to reach a value of $162 billion.

Across the board, production is increasing, as are the value of exports. Unfortunately, Canada’s port’s aren’t keeping pace, says GoComet, a transportation logistics company: “Port congestion is one of the biggest shipping problems faced by corporations of Canada today. The government and industry are working together to address the issue through infrastructure upgrades and the implementation of new technologies. However, it remains a concern for businesses operating in the country and those looking to do business with Canada.”

GoComet aptly sums up the shackles that Canadian ports place upon increased domestic economic growth and commodity exports. The simple conclusion is that while Canadian firms and farms are increasing production, Canada’s ports are preventing these products from reaching the world.

Between 2010 and 2020, the annual average of demurrage charges paid by exporters at the Port of Vancouver were $25.7 million. Demurrage charges are fees paid by container ships waiting to be loaded at ports or terminals longer than the allowed free time. This inefficiency is highlighted in a report by the World Bank, which ranked the efficiency of 403 ports around the world: the Port of Vancouver ranked 389th, Prince Rupert 362nd, Montreal 344th. All of Canada’s ports are solidly in the bottom 25 per cent in terms of global efficiency.

In 2025, Nutrien announced $1 billion in funding for a new potash export terminal at the Port of Longview in Washington state, rather than at the Port of Vancouver. High costs and inefficiencies made the Canadian port economically unviable.

Canada’s Minister of Transport, Steve MacKinnon, expressed disappointment and lobbied Nutrien to reverse its decision — but University of Saskatchewan economist Joel Bruneau said Nutrien’s decision starkly highlighted the cost of congestion at Canada’s ports.

“If there’s bottlenecks … and Nutrien is saying those bottlenecks are problematic, then surely we should get rid of the bottlenecks in our transportation system, Bruneau said in an interview with the Saskatoon Star-Phoenix. ”

Some of the significant constraints include:

• Lengthy demurrage charges paid as vessels spend additional time sitting in port waiting to be loaded;
• Slow turnaround times to unload incoming trains and trucks and load outbound ones;
• Excessive regulatory burdens for expansion, especially environmental regulations;
• Lack of modern container movement and tracking technologies; and
• Unproductive labour relations.

It isn’t as if Nutrien made its decision out of the blue: the company announced its intentions to identify a suitable port for expanding its potash export capability six months prior to choosing the American port.

Despite the advance notice, the British Columbia government did not discuss with Nutrien what changes would be required by the Port of Vancouver to secure this $1 billion expansion. Clearly, Nutrien officials believed that the delays and constraints that epitomize the inefficiencies of the Port of Vancouver could not, or would not, be satisfactorily resolved, let alone addressed, in a reasonable amount of time.

Congestion at the Port of Vancouver is not a new problem. Port officials first proposed an expansion of the Robert Bank Terminal 2 in the early 2000s. The project finally received federal approval in 2023. The Port of Vancouver indicates that construction will take years, with a possible opening date of 2035 at the earliest. Construction also comes with 370 legally binding environmental regulations, which have historically slowed and delayed projects for years, if not decades.

The frustrations of the more than 30-year time requirement from proposal to potential completion are summarized by Daryl Fransoo, a Saskatchewan farmer and chair of the Wheat Growers Association. “For Canadian farmers, efficient ports mean more than just moving grain — they mean staying competitive in a world where speed and reliability win markets. Our government must take a hard look at other examples around the world and commit to slashing the timelines for port approvals and construction. Streamline environmental reviews, coordinate regulatory bodies, and prioritize projects that unlock export potential.”

By way of contrast, Fransoo points to Peru’s speedy construction of its Port of Chancay. Construction began in 2018 and by 2024, boats were being loaded with commodity exports. In a mere six years, Peru was able to move from conceptualization to operation for an entirely new port facility. Canada will take over five times longer with no guarantee of having an operating export expansion facility.

Port labour constraints

While existing port constraints hinder the volume and timeliness of exports, labour constraints also have substantial negative impacts. The Greater Vancouver Board of Trade estimated that a 2023 strike by over 700 International Longshore and Warehouse Union employees, disrupted trade worth an estimated $10.7 billion. Transport Canada (2021) has estimated that shutdowns to the Port of Montreal cost the Canadian economy between $40 million and $100 million per week. Strikes at the Port of Montreal in 2024, will have impacted the Canadian economy by hundreds of millions of dollars.

Strikes are far less common in the United States, which is part of the attraction for companies like Nutrien to use American export facilities instead of Canadian ports. The most recent work stoppage by port workers in the U.S. was a 3-day strike in 2024 that affected ports along the East and Gulf Coasts. This was the first labour disruption at American ports since 1977, a span of 47 years.

The unreliability of Canadian ports is accurately captured in a joint op-ed published in August by leading commodity exporting firms: “At a time when governments across the country are working to attract investment, strengthen supply chains and position Canada as one of the world’s most reliable places to do business, every major labour disruption sends the opposite message.” The op-ed was signed by large commodity exporting firms such as AltaGas, Bunge, Canpotex, Cargill, Cenovus Energy, Richardsons International, and Strathcona Resources.

Port functionality contributes to economic growth

According to the Organisation for Economic Cooperation and Development (OECD), Canada will have the worst economic performance of any industrial economy between 2020 and 2030 and is projected to continue to be dead last among the 40 economies studies from 2030 to 2060.

Source: Williams/OECD 2021.

Source: Williams 2021/OECD 2021.

The OECD clearly highlights how Canada’s economic performance has been, and will continue to be, hindered by barriers to economic growth, such as regulations governing Canadian port expansion and labour (See Figures 1 and 2). A 40-year period of the worst performing economy means that people not only need to be concerned about their children’s future but also that of their grandchildren. Federal governments need to acknowledge market factors that are adversely affecting Canada’s economy, rather than concentrate on achieving the objectives of special interest groups.

Recommendations

Reducing Canadian port inefficiencies is not a “someday, down the road” issue. It needs to be urgently addressed, right now. Governments need to initiate and lead this process, first by dramatically reducing the regulatory burdens placed on planned expansions. For every additional year required to expand the Port of Vancouver, the Canadian economy will lose billions of dollars. The federal government also needs to quickly reach an agreement with port labour to guarantee labour reliability, ending the near annual labour disruptions. Finally, Canada’s high demurrage costs need to come down — otherwise, Canadian exporters will be forced to seek alternative markets, as well as alternative export destinations such as Washington state.

Diversifying export markets is sound economic strategy — but only if Canada has the port capacity to efficiently serve the global market.