Blogs & Comment

8 Years of Unfettered Trade

An unprecedented labour deal on Vancouver's docks should reassure importers and exporters—but it comes at a price

The British Columbia Maritime Employers Association and the International Longshore and Warehouse Union last week hammered out a collective agreement, now ratified by the union’s 4,500 members, lasting an unprecedented eight years. That’s good news for importers and exporters that in the past have seen food shipments spoil on the docks or their just-in-time supply chains break down due to a disruption at Port Metro Vancouver, which handles around half Canada’s overseas trade. It also gives the Pacific Gateway and Canadian railways a competitive advantage over competing ports with shorter contracts such as Seattle and Long Beach, Calif.

The peace comes at a price, though: pay hikes averaging 2.6% a year—3.5% to start with—with an intriguing cost-of-living clause in the final three years that protects workers in case inflation takes off. If the consumer price index exceeds that year’s wage increase, in other words, the longshore workers get more. We could see more of these 1970s-style escape clauses should inflation fears persist.

Another caveat is that ship and dock foremen belonging to ILWU Local 514 are still negotiating a new agreement and there are other workers at the docks (rail workers, self-employed truckers) not covered by this deal, leaving the potential for a disruption. But this was the biggest and hardest deal to reach, and bodes well for the expansion of Canada’s already growing trade relationship with Asia.