Federal budget supports supply chain

THE 2023 FEDERAL BUDGET includes a few measures to address supply chain issues.

The measures included are described in the budget document as a "down payment on Canada's National Supply Chain Strategy," which the government promises will be released in the coming months. It will be informed by the recommendations of the National Supply Chain Task Force report.

Topping the list, Transport Canada will have $27.2 million over five years, starting in 2023-24, to establish a Transportation Supply Chain Office. It will work with industry and other orders of government to respond to disruptions and better coordinate action to increase the capacity, efficiency, and reliability of Canada's transportation supply chain infrastructure.

This includes collaborating with industry, provinces, territories, and Indigenous Peoples to develop a long-term roadmap for Canada's transportation infrastructure to better plan and coordinate investments required to support future trade growth.

The Freight Management Association of Canada's president John Corey said this is something shippers have been asking for. The office will "hopefully improve communication and understanding of the supply chain’s importance to all government departments, something that currently not apparent," Corey said. He cautioned, however, that the danger is it will simply add a new layer of bureaucracy.

The budget also suggested amendments to the Canada Transportation Act will allow the government to "compel data sharing by shippers accessing federally regulated transportation services".

Compelling shippers to reveal confidential data may be harmful to shippers competitiveness, Corey said. "Without knowing, what type of data, how it will be collected, where the data will reside, who will have access to the data and how it will be used, it is difficult to comment positively on this item," he added.

Other regulatory changes planned in the budget include extending rail interswitching in the prairie provinces. Corey said extended interswitching was a key shipper recommendation in the National Supply Chain Task Force report, and is thus welcome. "Unfortunately the measure is temporary and limited geographically, but the hope is it will eventually become a permanent extension of the limit and made available to shippers across Canada," he said.

The Railway Association of Canada (RAC) said the extension of interswitching will end up costing Canadians. "This policy will cause Canadians to pay more for virtually everything that moves by rail,” said Marc Brazeau, the RAC’s president and CEO. Interswitching can slow down goods movement by 25 percent, he said.