As Brian Tischler drove a load of wheat to the elevator in his tandem truck, he mused about how reliant he was on one too-small vehicle to haul his grain to market.
The Mannville, Alta., farmer swallowed hard when he thought about how much he and most grain growers in Western Canada rely upon one port, Vancouver, to get their product to the world market.
“It’s scary,” he said, a simple summation of the reaction of most people in the grain industry when asked what would happen if the export route through Vancouver were lost for a season.
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“You’re talking billions of dollars in a hurry.”
Almost 50 percent of Western Canada’s export grains and oilseeds reach the world market through the Port of Vancouver.
The port is critical to more than grain farmers. Vancouver is Canada’s western gateway for coal, potash, lumber, sulfur and millions of containers of manufactured and processed goods.
Before getting to Burrard Inlet and English Bay, where the grain ships from the Orient sit waiting, trains carrying prairie crops have to snake through the Rocky Mountains and the narrow Fraser canyon.
“The rail lines are the weak link,” said Roland Stull, lead instructor for a disaster studies course at the University of British Columbia.
“There are places where there are just one or two lines going across B.C., which is scary.”
Rail and port labour disruptions, avalanches, train derailments and poor railway company performance are common occurrences, losing farmers lucrative sales and costing demurrage charges.
But what if an earthquake, a tsunami, a long and violent strike, or a social calamity like a pandemic hit the Port of Vancouver?
Or what if that thin rail route down the Fraser Valley was hit by an earthquake, a major landslide or blocked by a protracted and violent land claims dispute?
This might seem preposterous, but all these things have happened somewhere in Canada.
Seismologists say enormous earthquakes have shaken the B.C. coast in the past and will again. The only question is when.
In 1965, one of the largest landslides recorded in Canada killed several motorists and blocked Highway 3 in southwestern B.C. under 85 metres of mud, rock and debris. In 1903, 82 million tonnes of rock from Turtle Mountain crashed down on Frank, Alta., killing 600 and blocking the rail line. In 1917, the Port of Halifax was devastated when two ships collided, one carrying munitions.
More recently, Hurricane Katrina’s devastation of New Orleans shows what can happen when a natural catastrophe meets inadequate preparation.
That says nothing of the disruption that could be caused by a disease pandemic like the flu, social strife like the Winnipeg General Strike or an aboriginal land claims dispute like the one at Oka, Que.
“It’d be catastrophic,” said pulse industry analyst Brian Clancey of a scenario where Vancouver’s port was inaccessible for months.
“Everything would back right up to the Prairies.”
The grain industry would be thrown into chaos. Depending on the calamity, the port might be closed, terminals might be shut down or damaged, or grain could not get to the port. Ships arriving to load purchased grain would have to wait or move on to other suppliers.
Some grain could be rerouted to Prince Rupert, but with only one terminal, its capacity is much less than Vancouver’s.
Grain companies and the railways could begin arranging shipments through the United States. Thunder Bay and Churchill could also see increased shipments.
“I would think that the industry in a matter of a month or so could put together a reasonable program going through the Pacific Northwest, and certainly Prince Rupert would just be a matter of ramping up,” said former Canadian Wheat Board chief executive officer Adrian Measner.
“But could you account for all the lost capacity of Vancouver? It wouldn’t be possible.”
Churchill and Thunder Bay are useful ports. At one time Thunder Bay was the dominant port for prairie crops but it can’t be used over the crucial winter shipping season when Canadian farmers often receive the best world market prices.
If the route through Vancouver was lost at harvest time, using U.S. rail lines might not be easy because they would be filled with U.S. hopper cars taking American farmers’ crops to market.
Measner estimated that after a few months, an alternate shipping network could take about 60 percent of the dislodged Vancouver-bound crop.
But that would probably leave much less Canadian crop heading to West Coast ports, restricting farmers’ access to lucrative markets like Japan.
Transportation analyst Paul Earl of the University of Manitoba said Canadian crops would probably start moving into the U.S. as U.S. grain marketers jumped to supply markets formerly served by Canada.
“In an open market, things tend to arbitrage,” said Earl. “Technically, there are other alternatives.”
A perfect economic situation might allow Canadian crops to fill in demand left behind by American export sales, but political realities sometimes block access across the border. The reaction of American farmers and farm organizations to huge shipments of Canadian crops into their domestic market might not be friendly.
A disaster limiting grain sales out of Vancouver would affect western farmers immediately. First, transportation and grain industry experts say, elevators would become plugged with grain that was to be shipped to Vancouver.
Deliveries would stop until the grain industry was able to rewire the system and divert grain to alternative users and ports. Once deliveries resumed, the basis would likely widen, pressuring farmgate prices lower.
Measner estimated that basic transportation costs to alternative ports would increase by about $15 per tonne, plus another $10 because of the suddenly strong position that rail companies and terminals would be in with the emergency demand from prairie farmers.
“It would be devastating,” said farm marketing adviser Errol Anderson about the financial impact to producers.
“The biggest worry would be cash flow. Guys need to get paid.”
To make sales, farmers would have to be willing to accept the wide basis levels, which would widen further as the pressure of deliveries increased. In essence, farmers would have to buy a way to sell their crop.
And because some of the best paying customers would have moved to other suppliers, remaining customers would be the lower paying ones.
In the end, Canadian crops would find a market, but for many producers it might take too long and cost too much.
“It wouldn’t be the end of farming, but it might be the end of a lot of farmers,” said Tischler, who is also president of the Canadian Canola Growers Association.
Anderson said there would be enormous pressure for an expensive farm aid package.
But given that many sectors of the economy would be hurt by an extended disruption to Vancouver shipping, government might have to ration its assistance.
Losing access to Vancouver would be devastating, experts agree, but virtually no contingency planning has been attempted by the grain industry.
The Canadian Wheat Board was contacted but did not want to talk about this issue. The Canadian Grains Council did not return a phone call requesting information.
Measner said the council has held some preliminary discussions about plans for a pandemic, but hasn’t talked about what to do in the face of a natural disaster.
It might be a good idea to start.
“There could be some preliminary planning on that. It’s not uncommon for industries to do that,” said Measner.
“It may not be in anybody’s mind as a priority, but it doesn’t take a lot of work to put together a rough outline of what actions they would take if it did happen.”
Canadian National Railway spokesperson Kevin Franchuk said his company wouldn’t publicly reveal what it would do if there was a disaster, but “if a disruption would occur, we would work around it. That’s an important line for us.”
For farmers, hoping for the best but preparing for the worst might be a sensible course of action, said Marvin Shauf, policy manager for Agricultural Producers Association of Saskatchewan.
“It’s absolutely worth talking about things that could be before they are things that are,” said Shauf.
While figuring out transportation work-arounds is important, some think the best defence for prairie farmers is to reduce exposure not just to Vancouver’s port, but also to offshore markets in general.
“If you have 30 years before something happens, it will all work out,” said Canola Council of Canada president Barb Isman.
“The problem would be if it happens in the next 30 days.”
Her long-term confidence is based on the changing market for prairie grain.
“An increasing portion of the crop is no longer being exported but is being kept here at home and value-added,” said Isman.
In canola, demand for specialty oils has surged in the U.S. New domestic crushing plants are being constructed and soon demand for biodiesel will become a powerful force to keep canola in Canada.
Isman herself is an example of the swing away from the offshore market.
After years spent building export canola markets in China and Pakistan, she has just accepted a job with the Canadian Bioenergy Corp., which is planning to build a 100 million litre biodiesel plant at Fort Saskatchewan, Alta.
The offshore market still takes about half of what prairie canola producers grow. But years from now it may be a much lower proportion, and therefore losing access to Vancouver would be a problem, but not a crisis.
“You have to be ready for any and all eventualities, and you have to have your commodity fully diversified,” she said.
Tischler agreed.
“It’s key to counterbalance some of these rail problems,” he said, a few days before seeding his 2007-08 crop.
“You just need to move the producer further up the chain.”
But as he stood on the side of the road talking, his tandem loaded with last year’s wheat, he hoped that he’d have the chance to develop and upgrade his personal grain transportation system before a crisis struck.
And he hopes that the prairie farm community can develop new domestic markets for its crops instead of relying so heavily on a distant and vulnerable port.
What if: HURRICANE
Hurricanes do not threaten Vancouver. But the devastation Hurricane Katrina caused to New Orleans and the Gulf Coast is a reminder of how the power of nature can force even modern cities to their knees.
What if: EARTHQUAKE
A magnitude 6 or 7 earthquake strikes southern B.C. and western Washington every 20 years. If the epicentre were near the heart of Vancouver, there would be enormous damage. More remote but more frightening is a massive magnitude 8 quake on the fault line west of Vancouver Island like the one in 1700.
What if: STRIKES
Strikes are familiar in the grain export industry. Most are settled within weeks, but sometimes they drag on. Even general strikes that cripple a city, like the Winnipeg strike of 1919, are not unknown in Canada. Other protests, like the First Nations standoff at Oka, Que., could also cause disruptions.
What if: LANDSLIDE
Vancouver’s rail link to the Prairies is constricted in many areas, like the Fraser canyon in B.C. Landslides are a threat. The Hope, B.C., slide in 1965 and the Frank, Alta., slide in 1903 are examples of the devastation that can follow.
What if: SOCIAL UPHEAVAL
Canada is a peaceful nation but if disaster struck and the response was slow, tensions would likely rise. Rioting, looting and mayhem are not unusual following natural disasters.
What if: TSUNAMI
An earthquake where the Pacific and North American plates collide could cause a tsunami. The wave would cause havoc on Vancouver Island but Vancouver, in the lee of the island, would be protected.
