After three weeks, the Canadian government continues to struggle with addressing the rail blockades across the country, which are halting the flow of goods, hindering travel and threatening the future of the country as a sure investment for energy and infrastructure firms.

“One of our agriculture clients told me the blockades are costing them $1 million a day,” Danny Braunstein, the Winnipeg-based vice president of sales and business development for Talbot Marketing (asi/341500) in London, ON, told ASI Canada. “Many of our key accounts, particularly in agriculture and manufacturing, are being impacted significantly, which will undoubtedly affect their revenue and earnings and ultimately their marketing spend with us.”

Police attempt to disperse protestors on CN Rail tracks near Toronto.

This week, Transportation Minister Marc Garneau said that resuming normal operations on transit lines will take weeks, if not months.

“Even if the barricades all came down tomorrow and the trains worked very hard to get back up to speed, some of these effects are going to be felt for weeks and months to come,” he said in the House of Commons in Ottawa. “There are 50 grain ships on the west coast waiting to pick up grain,” he said, before adding that CN Rail had told government representatives there are currently almost 190 trains at a standstill. “If you lined all that up you would go from here in Ottawa past Montreal end-to-end,” he said. “That’s a lot of stuff that needs to move.”

In a news conference this week, Canadian Federation of Agriculture President Mary Robinson warned that the blockades were causing critical supply shortages for farmers who can’t get their goods to market. She called for “decisive action” from the government, adding that farmers are being “severely and harshly impacted.” Critical shortages in propane means they can’t heat their facilities, which endangers livestock.

“The widespread collateral damage of these protests is grinding our entire industry to a halt and is taking a massive toll on farmers across the country,” Robinson said. “Canadian agriculture is quickly reaching a tipping point.”

While there were hopes an agreement could be made between the government and protesters this week, those hopes were soon dashed. A government ultimatum issued last Sunday with a deadline of midnight on Monday, Feb. 24 ordered protesters at a railway line on Tyendinaga Mohawk Territory outside Belleville, ON to disperse or Ontario Provincial Police (OPP) would be called in and issue arrests. The order was not heeded and OPP moved in, apprehending 10 individuals. On Wednesday morning, protesters set fire to a rail line in a second barricade encampment in Tyendinaga, stopping all freight train traffic there.

Monday’s police action spawned new solidarity protests across the country that have continued all week, including at the trade-critical Port of Vancouver; Sherbrooke, QC; Montreal; and along the Lakeshore West GO Line (regional rail for the Greater Toronto and Hamilton area) between Niagara Falls and Hamilton during rush hour on Tuesday. While that protest peacefully dispersed, a new one cropped up on the GO Line’s Milton route. Police made arrests there, though they would not comment on the number or specific charges, and service is gradually resuming to normal levels after 30 people were forcibly removed from overnight protests.

“By Tuesday evening, the protests across the country had entered a phase somewhere between whack-a-mole and a game of high-stakes chicken,” reports Richard Warnica of Canada’s National Post. “Police, armed with court injunctions, were clearing out or had announced plans to clear out blockades and demonstrations in three provinces. But for every blockade cleared so far, several new ones have appeared. They’re fueled in part by outrage over the images of officers tackling and dragging away protesters that appear online after every new enforcement.”

The pressure continues to intensify on Prime Minister Justin Trudeau to address a situation that’s becoming increasingly difficult to solve. It’s a delicate line to walk, one that combines environmental concerns, First Nations’ rights to land, Canadians' rights to working infrastructure and the future of energy investment in Canada as well as its ability to be a reliable exporter of agricultural goods.

Some promotional products companies have imports held up in ports on both coasts, where they’re stuck on container ships or in warehouses because they can’t be loaded onto rail cars for transport inland. “While some goods have been released, many of our shipments are now stuck in the shipyard in British Columbia,” said Rob Spector, president of Montreal-based Top 40 supplier Spector & Co. (asi/88660). “These are goods we were depending on arriving. Right now, it’s affecting us more than coronavirus.”

Other companies say they’re not feeling much squeeze from the blockades. “Our supply chain isn’t currently impacted in any serious fashion,” said Daniel Baker, marketing manager at Debco (asi/48885), part of HPG (asi/61966). “Any congestion at our western ports are almost entirely cleared, and we’re getting constant updates from CN Rail with regards to any potential issues, and their timeline for resolution.”

At the same time, a new study out this week shows the ripple effect these protests are having on Canada’s economy, particularly among small businesses. The Canadian Federation of Independent Businesses (CFIB) says that almost a quarter of small businesses in Canada have lost approximately $60,000 as a result of the protests, and 48% say they’ll feel the impact soon.

“Many business owners across the country are telling us they have already had to suspend operations, lay off staff or ration supplies,” Dan Kelly, president of the CFIB, told HR Reporter. “Many are in danger of losing important contracts to other international competitors, and they worry about how this will hurt their reputation with clients going forward. While there are no easy answers to this complex issue, the risks of inaction are significant too.”

The CFIB also expressed concern about the impact the crisis will have on Canada in the years to come. “This situation could have consequences for small businesses and Canada’s economy as a whole that extend well beyond the blockades,” said Laura Jones, CFIB’s executive vice president, who added that CFIB’s data found that 90% of business owners are apprehensive about the long-term effect on investor confidence in Canada. “Ultimately, Canada needs a clear path forward to balance economic development, environmental policy and indigenous land rights to avoid repeating this situation and restore investor confidence.”

In a high-profile example of investors getting cold feet, on Sunday energy firm Teck Resources backed out of plans to build a $20 billion Teck Frontier oilsands mine in Alberta. “Unfortunately, the growing debate around [climate policy] has placed Frontier and our company squarely at the nexus of much broader issues that need to be resolved,” wrote Teck CEO Don Lindsay in an open letter. “In that context, it is now evident that there is no constructive path forward for the project.”

Andrea Van Vugt, the global director of Harper & Associates, a consulting firm established by former Canadian Prime Minister Stephen Harper, told ASI Canada she’s apprehensive about the impact on the Canadian economy over the next months and years. “This [creates] concern about the federal government’s project decisions, even when it’s been demonstrated that the project is in the national interest and has the support of the local indigenous communities,” she said. “There’s also a growing concern that the police, courts and governments can’t seem to find a path to ensure that the country functions properly. And the Teck project decision has emboldened protesters.”

Moving forward, Van Vugt calls “social license” for resource projects a “moving target” that the government is going to have to figure out how to address. It also compounds concern regarding the “Wexit” movement of Alberta separatists that’s been gaining traction in recent months; it's fueled in part by frustration that their natural resource-rich province can’t benefit economically because of government policy that doesn’t favor fossil fuels. Resource projects are a “key economic driver” in Canada, said Van Vugt, and hindering them further would be “devastating” for the country.

“Every Canadian wants resource development projects to be carried out in a sustainable manner that protects the environment,” she said. “The challenge is that a small minority of individuals who want to put an end to resource development are winning.”