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Indigenous Protests Cripple Parts of Canada’s Rail Network

Theophilos Argitis, Doug Alexander and Shelly Hagan

(Bloomberg) -- Prime Minister Justin Trudeau said the government will do everything it can to resolve protests that have crippled the country’s railways, leading to disruptions in passenger travel and the shipment of key goods.

“We are a country that recognizes the right to protest but we are a country of the rule of law and we will ensure that everything is done to resolve this through dialog and constructive outcomes,” Trudeau said during a press conference in Munich.

Environmental and indigenous-rights activists are blockading rail lines, ports and other infrastructure to show solidarity with portions of the Wet’suwet’en Nation that are protesting construction of TC Energy Corp.’s planned C$6.6 billion ($5 billion) Coastal GasLink pipeline through their territory in British Columbia.

When asked whether the pipeline project will still proceed despite the protests, Trudeau emphasized that Canada has regulatory processes and a judicial system in place for the country to operate smoothly. “The responsibility of government, and of all levels of government, is to serve their citizens in the best way possible, and the legal framework we have built for our country is an important touch point for that,” he said.

Key Developments:

Canadian National Railway Co., the country’s biggest rail network, is shutting down operations in Eastern Canada, possibly leading to temporary layoffs.All Via Rail passenger traffic across the country has been haltedBusiness leaders increasingly frustratedRBC Capital Markets says protests another reason keeping Bank of Canada “biased to ease”

West Coast ports “will take weeks” to resume service after supply-chain delays, the Chamber of Shipping says.

Garneau Says ‘Concerned’ About Protests, Pledges Dialog (12:27 p.m.)

Canadian Transport Minister Marc Garneau said while he’s “deeply concerned” about the impact of nationwide protests that are crippling the country’s railways, the government is intent on resolving the situation by engaging with First Nations.

Environmental and indigenous-rights activists are blockading rail lines, ports and other infrastructure to show solidarity with portions of the Wet’suwet’en Nation that are protesting construction of TC Energy Corp.’s planned C$6.6 billion ($5 billion) Coastal GasLink pipeline through their territory in British Columbia.

Federal Ministers to Meet with Indigenous Leaders (10:30, NY)

Garneau said he’s encouraged by the removal of a blockade in British Columbia after the Canadian and provincial governments agreed to meet hereditary chiefs to discuss their grievance, allowing trains to begin running to the port of Prince Rupert.

“Freedom of expression and peaceful protests are among the most fundamental rights of people in a democracy and must be respected and protected,” Garneau told reporters in Toronto. “However, I am deeply concerned by the demonstrations that are deliberately preventing the operation of our railways,” he said.

Minister of Crown-Indigenous Relations Carolyn Bennett, will meet with protesters in British Columbia, while Minister of Indigenous Services Marc Miller will meet with groups that are running blockades in Ontario.

Hard to Find Trucks to Replace Rail, Retailers Say (11:00 a.m., NY)

The Retail Council of Canada says 20% of its members’ shipments go by intermodal transit. Walmart Inc. is the No. 3 customer of CN, according to data compiled by Bloomberg.

“It’s not like somewhere in a subterranean garage there are thousands of additional trucks just waiting to be turned on to provide redundancy,” said Karl Littler, senior vice-president of public affairs at the council, which represents 45,000 storefronts. “Rail moves a lot of heavy volume, and it is already integrated with trucking.”

The group recognizes the right to peaceful protest, but believes in the rule of law, Littler said. “When injunctions are issued they should be followed, and if they have to be they should be enforced by public authorities,” he said.

Rail Disruption Another Factor Keeping BOC ‘Biased to Ease,’ RBC Says (8:05 a.m. NY)

RBC Capital Markets called the CN shutdown another “transitory” impediment to growth.

“Alongside possible virus-related distortions, it is becoming harder for the Bank of Canada to disentangle exactly what factors are contributing to expected below-potential growth,” Mark Chandler, and Simon Deeley, rates strategists at the Royal Bank of Canada unit.

That “below-potential growth” still seems likely for both the fourth quarter and first quarter and, at the margin, “it should help to keep the central bank biased to ease,” they added.

Resumption of Service ‘Will Take Weeks’ at West Coast Ports (3:25 a.m. NY)

Supply Chain disruption is leading to congestion at Vancouver and Prince Rupert Ports from stranded imports and diminished capacity to service export cargoes, according to the Chamber of Shipping.

In 2018, Canada’s ports moved over 342 million metric tonnes of cargo.

“This action is harming the reputation of Canadian ports and the Canadian supply chain,” Robert Lewis-Manning, president of the Chamber said in a statement. “Even a resumption of service at this stage will take weeks to resolve and impacts the markets that Canadian shippers serve.”

The Chamber of Shipping represents commercial carriers and their agents which trade internationally and domestically.

--With assistance from Divya Balji.

To contact the reporters on this story: Theophilos Argitis in Ottawa at targitis@bloomberg.net;Doug Alexander in Toronto at dalexander3@bloomberg.net;Shelly Hagan in ottawa at shagan9@bloomberg.net

To contact the editors responsible for this story: Derek Decloet at ddecloet@bloomberg.net, Jacqueline Thorpe, Chris Fournier

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