UPDATED: Port automation could cost thousands of jobs, tax income: union

Employers to work collaboratively with those impacted by automation

Port of Vancouver | Photo: Chuck Chiang

A business-as-usual approach allowing creeping automation in B.C.’s ports without government intervention will lead to economic chaos, heavy job losses and significant loss of tax revenue, said an International Longshore and Warehouse Union (ILWU) Canada report released August 27.

Union president Rob Ashton unveiled the report saying automation at B.C. ports could eliminate 9,200 jobs and cost the provincial economy $600 million annually. And that’s on top of a yearly loss to B.C. taxpayers of $100 million for government programs, he said.

“If you start automating more terminals, the damage could be catastrophic,” Ashton told a Vancouver news conference.

He said if foreign companies set up shop in Canada and create imbalances in port employment and the benefits that flow from that from communities, it is the federal government’s responsibility to redress that imbalance.

“Automation should not simply benefit only corporations while leaving workers and their communities to deal with the damage left behind,” Ashton said.

Prism Economics and Analysis prepared the report.

“Disruption on this scale will be felt by the provincial economy and will have an acute effect in some local communities, particularly those that rely on this industry for good jobs and the economic benefits they bring locally,” Prism partner John O’Grady said.

The report broke down the impacts by communities on the B.C. coast, saying automation could eliminate significant numbers of middle class and high-income jobs in marine-dependant communities. It focused only on the container sector of port operations.

The report said longshore employment accounts for 26% of all jobs paying more than $70,000 a year in Prince Rupert. In Delta, the number is 11% and 2% in Vancouver.

Further, it said, such jobs account for 66% of all jobs paying more than $100,000 a year in Prince Rupert. In Delta, the number is 23% and 3% in Vancouver.

The report looked at two scenarios: brownfield ones – in which an automated facility would replace an already existing non-automated facility – where marine and greenfield ones, which would see a new facility built from scratch.

In the brownfield scenario, the report predicts the loss of 2,300 jobs in Delta, 2,200 in Vancouver and 700 in Prince Rupert.

In the greenfield scenario, those numbers are 4,100 in Delta, 4,000 in Vancouver and 1,200 in Prince Rupert. That would also lead to an estimated net loss of $66.6 million in federal tax revenue, $29.9 million provincial revenue and $8.3 in municipal revenues.

“It is clear that the loss of jobs stemming from automation will have a significant impact on lost wages for individual workers but also the communities in which they live,” the report said.

Ashton said if the federal government does not step in and prevent corporations from automating ports, the impacts will be significant. He wants the issue on the table for October’s federal election.

The automation issue loomed large over contract talks earlier this year.

While it nearly 18 months to secure a new collective agreement between B.C.’s port workers and maritime employers represented by the B.C. Maritime Employers Association (BCMEA), it’s going to take far longer to secure consensus between the two sides on how the province’s terminal operators will incorporate automation in their cargo-handling processes.

BCMEA chairman Jeff Scott said the recently signed collective agreement with the ILWU would provide stability.

“We have witnessed 34% job rate growth since 2008 as well as established a record-setting nine million hours worked last year,” Scott said in a statement to Business in Vancouver. “We are committed to continuing to work with all those potentially impacted by the prospect of automation in B.C. We are confident that this collaborative approach will ensure that BC’s maritime economy remains strong.”

However, that consensus is something major U.S. port competitors on the West Coast are already struggling with

The fight over plans by the port division of the world’s largest container carrier company to upgrade Pier 400 infrastructure at the Port of Los Angeles is a flashpoint example.

Unions there oppose what they see as the huge social and financial costs that will be borne by their membership from any significant automation of containerized cargo movement. 

Transport Canada spokesman Alexandre Desjardin said the maritime labour sector plays a key role in support of Canada’s economy and ensures reliability and resiliency in Canada’s supply chain.

He said labour’s contribution will be increasingly important in a connected, integrated world but in an operating landscape that will continue evolving.

“Drivers of change in the operating landscape for ports include the restructuring of the shipping industry, enhanced needs for port connectivity and port sustainability, emerging safety and security risks and a commitment to enhance engagement with Indigenous and local port communities,” Desjardins said.

Canadian port authorities – such as the Vancouver Fraser Port Authority and the Prince Rupert Port Authority – are federally incorporated, autonomous, non-share corporations that operate at arm’s length from the federal government and lease lands to container terminal operators, Desjardins explained.

And, he said, port container terminals at ports are run by operators who not only employ workers, but also determine the technologies they use in their operations. This includes whether and how to modernize their operations and the technologies.

“Canada’s trade agenda and economic development is contingent on a healthy mix of technological innovation and labour force stability,” he said. “To that end, Transport Canada closely monitors developments in the marine industry on issues such as terminal automation.”

Spokeswoman Danielle Jang referred questions to the BCMEA.

“As port terminals are private operations, the port authority does not manage terminal operations or labour at the terminals,” Jang said.

Prince Rupert Port Authority vice-president of public affairs and sustainability Ken Veldman said new terminal expansion projects there are based on employment-intensive terminal models.

“Fairview Terminal is working to expand capacity by 33% by 2022 and this will create additional long-term employment,” the statement said, noting remaining competitive demands evolution of supply chain techniques.

“The nature of jobs across every industry is always changing and technology has a role to play in improving competitiveness and terminal safety,” the statement said.