While a shift in world markets from Europe to Asia has clearly been the biggest factor in Thunder Bay’s dramatic decline as a grain port, a stew of Canadian economic and political decisions has also played a role, Thunder Bay officials say.
Thunder Bay boosters avoid making allegations that the inland port is the victim of deliberate domestic politics.
But they do make an argument that the fallout from many domestic decisions has sideswiped the port and its grain trade.
“What I have seen in the last 16 years is that a number of things have conspired to exacerbate the situation,” said local transportation consultant and former New Democrat MP Iain Angus.
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“I’m not saying there was a conspiracy, but a number of different things have just worked together to make a bad situation worse.”
Thunder Bay mayor Ken Boshcoff is a bit more blunt.
“Was it inevitable?” he asked during a late October interview while campaigning for re-election. “I don’t think so. In many ways, the natural evolution should not have presented us with such a dramatic decline.”
It is a striking illustration of the ripple effects of policy and investment decisions in a complex, integrated political economy.
Thunder Bay rarely figured directly in the decisions that influenced it. The players making those decisions ranged from Ottawa politicians and prairie grain companies to railway companies and the Canadian Wheat Board.
The complaint that lies closest to the surface among local stakeholders is the widely held view that the federal Liberals have supported the port of Churchill with investment and granted it a competitive edge, allowing the northern Manitoba port to handle hundreds of thousands of tonnes that should be going through Thunder Bay.
“If the money, or half the money, they have spent on Churchill had been put into Thunder Bay and keeping seaway costs down, it would be a benefit to this port and to Canadian taxpayers,” complained Boshcoff.
Other decisions and investments have also affected Thunder Bay, even if that was not the direct intention.
Angus noted the hundreds of millions of dollars invested by the railways to double track to the West Coast have resulted in greater westward grain flows.
Liberal cuts to the Canadian International Development Agency during the budget paring of the 1990s meant fewer food aid shipments to countries in Africa and other eastbound destinations. That traffic would normally pass through the seaway.
The 1988 free trade agreement launched an expansion of grain sales southward, making the U.S. one of Canada’s largest customers. Thunder Bay is not an obvious export route to the U.S.
Rail deregulation, initiated by the Progressive Conservatives and escalated by the Liberals, made it easier for railways to compete with Thunder Bay and the seaway for direct rail shipments east.
“Deregulation of the rail industry starting in 1988 allowed rail rates east of Thunder Bay to fall dramatically,” said Lakehead University transportation expert Norman Bonsor. “Railway costs have fallen by more than 50 percent since 1988 and rates have dropped in that range.”
At the same time, the prairie grain industry has been consolidating, building large inland facilities and shipping more cleaned grain in unit trains that can bypass port terminals. Thunder Bay loses the cleaning business and the handling.
Even the tense relations between the Canadian Wheat Board and grain companies have had an impact on grain traffic.
The board, fighting to lower costs and return more to farmers, has been resisting winter grain storage and elevation costs that are charged by grain companies at their terminals. The board is shipping more winter grain directly to the lower St. Lawrence by rail rather than sending it to Thunder Bay for storage until the seaway opens in the spring.
It will likely mean the Thunder Bay terminals are closed down for two or three months this winter as the board bypasses them. Workers laid off in late December probably won’t receive a call-back until spring, when grain can be shipped to the terminals with the expect-ation of a quick transfer to ships.
“Deregulation and the free-for-all in the grain industry now has just put more pressure on the workers here,” said union representative Herb Daniher. “There is less work all the time.”
