Trucker protests threaten Canada with inflation, negative growth
BNN Bloomberg
Escalating blockades of key border crossings could lead to a contraction of Canada’s economy in the first quarter and the new supply snarls have to the potential to fuel inflation, economists say.
Escalating blockades of key border crossings could lead to a contraction of Canada’s economy in the first quarter and the new supply snarls have to the potential to fuel inflation, economists say.
Growth was already poised to slow sharply at the start of 2022 after the nation was hit with lockdowns meant to contain the omicron variant of COVID-19. Now, disruptions to commercial traffic -- potentially costing the Canada’s economy as much as $500 million (US$395 million) daily -- could put the recovery in reverse.
“As this drags on, and even spreads to more border crossings, it’s increasingly a threat,” Avery Shenfeld, chief economist as Canadian Imperial Bank of Commerce, said by email, adding he had already been anticipating flat growth for the quarter before the blockades. “It wouldn’t take much of a headwind to tilt that slightly into the negative.”
Protesters have been blocking access to the Ambassador Bridge between Detroit and Canada -- the most important link for goods moving between Canada and the U.S. and a crucial artery for auto parts suppliers and manufacturers. The blockade started Monday as an offshoot of the trucker convoy occupying downtown Ottawa to protest against a vaccine mandate for drivers who travel across the border.
Demonstrations have also shut down border crossings in Manitoba and Alberta, disrupting shipments of agricultural products and other goods.
The blockades not only are a drag on growth. They risk further straining supply chains and intensifying price pressures that are already at the highest level in three decades.
