B.C. FLOODING COULD BE CANADA’S COSTLIEST DISASTER AS CUT-OFF PORT OF VANCOUVER SNARLS SUPPLY CHAIN
“There have already been really dramatic and heartbreaking community level costs — you’ve got municipalities that have been hit really, really hard,” Fellows said.
Goods arriving in Canada to be sold ahead of Christmas and staples such as food supplies will likely be stuck on ships and delayed in reaching store shelves.
“You’ve got product that is sitting in Vancouver harbour that can’t get out of Vancouver. It’s too late to redirect those ships to another port… and there’s nothing on the western seaboard that has capacity anyways,” said Michael Graydon, CEO of Food, Health and Consumer Products of Canada.
Canada’s mining companies, agricultural producers and commodities exporters also see delays in shipping their goods overseas, or will be forced to ship through the U.S.
Teck Resources Ltd, a copper and coal miner, said in a statement that it was diverting trains from Vancouver to a Prince Rupert terminal. Canpotex Ltd, the potash export company owned by Nutrien Ltd and Mosaic Co, will ship more of the crop nutrient through its smaller terminals in Portland, Oregon. and Saint John, New Brunswick, spokesperson Natashia Stinka said.
“There’s going to be more shortage than had already been expected,” Heaver said of the flow of goods into Canada as a result of the port being cut off from the rest of the country, adding the damage to roads and railway lines into Vancouver will add to congestion at the port and cause further delays transporting goods.
CP Rail chief marketing officer John Brooks called the western corridor the company’s “lifeblood.”
“Just about all commodities to some extent flow through that,” he said.
Both the country’s major railways said they had suffered damages as a result of the flooding but did not provide a timeframe for when the lines would be completely repaired.
CP Rail has deployed crews and equipment to the region and its engineering teams are working to repair damage to the company’s railway lines “as quickly as possible where safe to do so,” spokesperson Salem Woodrow said in an email to the Financial Post, adding there is no time estimate for when service will resume.
The head of Canada’s largest grocery chain also warned Wednesday the flooding in B.C. could further stress supply chains in the country.
“We’ll have to see, given what’s happened in British Columbia with weather over the last couple of days, whether that has any kind of incremental disruption. We suspect it will, but only for a limited time,” Galen Weston, president of Loblaw Companies Ltd., said on an earnings call.
Weston said ports in western Canada and the northwestern U.S. have kept Canada from experiencing the worst of the supply chain crunch the U.S. has experienced
If the problem persists another week, there is potential for another crisis in the form of a fuel shortage. The Trans Mountain pipeline system, which supplies 300,000 barrels of oil per day to the Vancouver region, shut down four days ago during the extreme weather.
Trans Mountain said in a statement Wednesday that it had conducted an aerial survey of the affected areas and more on-the-ground analysis is needed “to determine if there is work required to repair or re-establish protective cover where the pipe has been exposed due to flooding.”
“Now we’re getting to potentially a little bit more of a critical time period,” said Patrick De Haan, head of petroleum analysis with GasBuddy in Chicago, noting that a four-day shutdown of the Trans Mountain pipeline isn’t showing up in fuel prices yet, possibly because drivers are staying home as a result of the road closures.
“If we go beyond maybe six or seven days, we could be seeing more of an impact,” De Haan said.
Meanwhile, natural gas prices at the Northwest Sumas hub at the Washington-British Columbia border jumped about 38 per cent to their highest since late October after Enbridge Inc. reduced flows on its Westcoast pipeline due to flooding . That was the biggest daily percentage gain at Sumas since the February freeze left millions without power in Texas.
The massive wildfires in Fort McMurray, Alta., in 2016 is widely considered to be the costliest natural disaster in Canada, with estimated insurance loss of $3.58 billion. Earlier this year, some B.C. towns were devastated by wildfires that led to insurance damages of $78 million, according to the Insurance Bureau of Canada.
Story by: Financial Post