Julia Kuzeljevich TORONTO, Ont. –A strong Canadian dollar, weaker southbound volumes, snags and quagmires at the border and on the road to it. Welcome to more of the same in 2008.
While it may not look so different from other years and other predictions for trucking, (save for the pari- ty-plus dollar), 2008 brings at least the promise of greener fleets and better roads from Canada’s provincial trucking associations, who’ve been pushing for change in their respective agendas.
According to economist Derek Burleton, associate vice-president, and director, economic studies, TD Bank Financial Group, the steady rise of the Canadian dollar, coupled with high energy costs, will likely mean a dampening of the economy well into 2008.
“Overall, Canada’s regional economies are seeing a shift of reliance from the US to international markets, but the US will continue to be the lifeline of the Canadian economy,” said Burleton.
“Alberta’s economy will lose some steam, cooling off to a growth rate of about 3% into 2008 (down from 4% this year) tied to cost pressures, labour shortage, and shortage of materials,” he said.
British Columbia, Saskatchewan and Atlantic Canada appear to be benefiting in some ways from Alberta’s losses. B. C. and Saskatchewan anticipate healthy job growth as the cost of living in Alberta grows and jobs spill over to the neighbouring provinces.
Atlantic Canada, meanwhile, has seen a renewed flurry of activity in energy, utilities, construction and manufacturing, with New Brunswick leading. In Nova Scotia the forestry sector continues to decline.
“In Ontario and Quebec, in 2008 we predict continued lean times with contraction in manufacturing,” said Burleton.
And all of the provinces face broader, long-term challenges with regard to infrastructure.
“There are optimistic signs that the government is getting the message about this challenge but it’s a long-term issue. Border fees and infrastructure are huge setbacks. There’s still a need for the provinces on the whole to look at improving trade opportunities,” said Burleton.
The data has not been lost on Western Canada’s provincial trucking associations, which have been ramping up efforts to meet the challenges ahead.
According to British Columbia Trucking Association president Paul Landry, southbound volumes in the province were already slowing down even prior to a significant rise in the dollar.
But on the jobs front, with Alberta’s economy cooling slightly, Landry said that carriers in B. C. are finding it a bit easier to find qualified workers.
He said the BCTA is pleased with funding commitments to improve infrastructure in the province.
These include improvements to the Trans-Canada highway, the South Fraser perimeter road, key east-west and north-south routes Highways 10 and 15, and bottlenecks removed at Kicking Horse Pass and Kelowna.
On the environmental front, Landry has made several recommendations to B. C.’s Select Standing Committee on Finance and Government Services that he said would provide financial incentives to encourage the trucking industry to step up its efforts to reduce greenhouse gas and smog emissions.
“We’ve indicated our strong desire and willingness to work with government on environmental initiatives. We want government to provide more regulatory flexibility (weight forgiveness for APUs, and the widespread allowance of super singles). We’ve also requested that government consider financial incentives for the acquisition of new trucks and for legacy fleets, such as forgiving sales tax for new equipment, waiving first year registration or licensing fees, etc.) While it’s difficult to say what their response will be we wanted them to understand the industry’s resistance to acquiring new equipment,” said Landry.
BCTA has been pushing for minimum truck driver training that would be available through a coherent and consistent training system of approved institutions.
The program would consist of pre- Class 1 licensing and on-the-job training by employers who also have to meet certain standards.
ITA-approved driver trainees would be distinguished from regular Class 1-licence holders, would allow access to student funding for trainees and facilitate graduates’ entry into the trucking industry.
At press time, the standard had received approval in principle by the province’s Industry Training Authority (ITA).
“The next step is to begin working on the program itself for their consideration. This process will probably take us to February 2008. We’ve engaged a consultant to help us define the skills and knowledge required. We’re hoping by late spring to have approval from ITA where we can move on and offer the program for fall 2008,” said Landry.
He stressed that such a program would need a strong commitment from employers.
“While the smallest of companies would struggle to be involved in this program hundreds have enough trucks and infrastructure to deliver mentoring and on-the-job training,” added Landry.
According to Mayne Root, executive director, Alberta Motor Transport Association, the trucking industry, like most other industries in Alberta, continues to have recruitment problems in all aspects of the industry from drivers to mechanics to office staff.
“We are competing with all of the other industries, some of which are able to pay better, even for general labour-type jobs. For drivers, insurance requirements and training costs make it difficult for younger people to get into the industry as they need to be over 21 and have the proper class of licence just to get started and, at that time, they cer- tainly aren’t qualified to jump into a tractor-trailer unit and hit the road. The company then has to provide them with on-the-job-training and mentoring to get them to the point that they can safely operate the equipment and handle the freight,” he said.
In the late ’90s the association, together with industry, developed the Transportation Training & Development Association to address the need to attract more people to the industry and provide the required training for them to be successful.
“In 2007 we received final approval from Advanced Education and Alberta Infrastructure and Transportation to conduct a pilot project for a college level course for professional drivers. Red Deer College and driving schools in Edmonton, Calgary and Lethbridge are working together to provide in-class and behind the wheel instruction for the multi-week course that is eligible for student funding. Unfortunately, conditions were placed on the program to not include the Class 1 training and licence. As a result, we are having difficulty getting students for the pilot project. The employers have adjusted their rate structure and benefit plans to maintain their current driving staff and to attract other, mature people to the industry. In addition, they have had to adjust their shift scheduling to better appeal to new entrants. Some carriers have also begun hiring foreign workers, where possible.
“As far as the business situation, the drilling sector has slowed considerably over the last year. I have heard that as few as 27% of rigs are working this year compared to 2006. This means a slowdown in the hauling of pipe, equipment and supplies to that industry but that is the only sector that has experienced a slowdown. I am still getting calls daily looking for companies who can carry goods within the province, nationally and internationally. We do not see this slowing into next year. The border security issues continue to add cost and time to highway transportation going south and coming back into Canada and many companies have completely pulled out of the international market but the rest are doing what they have to, to meet the constantly moving and more demanding requirements.”
With regard to infrastructure, said Root, Alberta has been fortunate to have a well-established hig
hway network but they are now encountering difficulty in keeping it properly maintained and upgraded.
“At last note from the province, they are several hundred million dollars behind on this. With the availability of more funding being announced in the last few months, we have seen an increase in the number and scope of projects being started – Calgary and Edmonton ring roads, Highway 63 to Ft. Mc-Murray, improvements to the Highway 3 corridor in southern Alberta, several interchange upgrades throughout the province, etc. These projects may be causing some traffic delays now but will result in safer and better highway systems in the future.”
According to Al Rosseker, executive director, Saskatchewan Trucking Association, the province is facing an acute driver shortage with many companies making use of the Saskatchewan Immigrant Nominee Program (SINP), which allows Saskatchewan to nominate applicants, who qualify under criteria established by the province, to the federal government for landed immigrant status.
“It’s a longer process than we’d like,” said Rosseker. “We also have the largest truck driver training school in Saskatchewan, which trained 1,200 drivers last year.”
There are also lots of initiatives to bring in new candidates from First Nations communities. While Rosseker said there isn’t a groundswell, it’s a step in the right direction. “There are members of our association working almost exclusively in the north (of the province),” he noted.
Southbound volumes have also not been good for the province.
“We’re not going to hurt as much as Ontario but goods aren’t moving. Some of the commodities are still flowing but the stronger dollar is making them more expensive,” said Rosseker.
The association, which in 2007 celebrated its 70th anniversary, has set out some key priorities for 2008.
“We would like to develop more partnerships with training entities. We’re also branching out with a pilot project on heavy equipment training as there is a shortage of skilled operators there too. There are so many components to trucking and a wealth of opportunity in the industry,” said Rosseker.
At press time, the province of Saskatchewan also announced a primary weight corridor network called Clearing the Path (CTP),with aim to increase primary weight access on municipal roads throughout the province for a more integrated transportation network.
Bob Dolyniuk, Manitoba Trucking Association’s executive director, said that there is currently excess capacity in the province.
“The auto, pulp and paper and BSE (mad cow) crisis have meant a shift in market focus for carriers. They have looked to other markets to keep their trucks busy,” he said. “We’ve been in this situation for over a year with excess capacity southbound and even domestically,” he added.
It has de-stabilized pricing and Dolyniuk said he expects a shakeout ultimately.
“Some carriers have just walked away from certain routes.”
With excess capacity, admittedly, some of the pressure is off the driver shortage, but Dolyniuk said the issue is not on the back burner and only means the association is looking harder at the question of making its membership more efficient and productive.
MTA members are actively involved in the immigration nomination program.
Manitoba Public Insurance is also launching a $5 million program over the next three years to train 250 new entrants per year for the industry, he said. Dolyniuk said that centres such as Winnipeg are well placed to attract business with the promotion of trade corridors like the Asia Pacific Gateway.
“As the cost of living rises with wages in Alberta, it’s less compelling to locate consolidation and distribution centres there, where the wage scales are competing with the oil industry.”
Manitoba has announced $4 billion in funding over 10 years to fund infrastructure. They’ve also committed $400 million over five years for bridges.
“These have not had the attention they’ve needed,” said Dolyniuk. “But if these projects don’t go through during this timeline, then the funds will go back into general expenditures and not into infrastructure.”
On the environmental front, Manitoba is looking at an ethanol and biodiesel mandate over the next few years.
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