It’s no secret that businesses in many industries (and therefore consumers) are facing inflationary pressures on their finances. This is a complex issue but one of the primary drivers behind the quickly rising cost of living and doing business is breakdowns in supply chains – itself a complicated issue, however one of the key factors is a by now a well-known cross-industry problem – the lack of available workforce.
In the Canadian context, a lack of people working as truck drivers is of particular importance given our land mass and interprovincial trade. The industry must attract, train and retain thousands of new truck drivers over the next few years to mitigate these issues. One key barrier to achieving these goals is the current financial support provided for such trainees is insufficient to attract the required number of people to the industry.
In the fall of 2021, the Canadian Trucking Alliance (CTA) reported approximately 23,000 vacancies for truck driving positions throughout Canada and estimates this number will more than double to 55,000 by 2024 (in the United States, there are approximately 80,000 vacancies). The CTA reported in April 2022 that nearly 50% of available freight loads don’t have a truck (driver) for transport.
What was an issue pre-pandemic has now become a full-blown crisis, affecting most sectors and aspects of daily life through supply chain disruptions and inflationary exacerbation. We’ve all experienced recently that our favourite product wasn’t available at the grocery store, or we had to wait a few extra days to repair a vehicle because the part needed didn’t arrive that week – the list goes on. The 2022 federal budget earmarked more than $600 million to address supply chain issues for infrastructure, data and red tape reduction. No doubt the solutions to our supply chain problems are multi-faceted but must also include a plan to increase human resource capacity – particularly in the trucking industry.
The Bank of Canada’s 2022 Q1 Business Outlook Survey identified supply chain disruptions as one of two key factors adding upward costs pressure to consumers and businesses. In the Chartered Professional Accountants of Canada’s Business Monitor published in May 2022, inflation and supply chain issues were seen as the top challenges to the growth of the Canadian economy in the coming 12 months, with lack of skilled workers and employee recruitment, retention and development the next two on the list. Each of these issues would be addressed in some way by increasing the trucking industry workforce.
One of the key issues preventing more individuals from entering training programs for truck driving is cost. Training requirements vary from province to province, but overall, student loans cover less than 50% of the cost of tuition of these programs. This gap can be a significant barrier for many individuals considering entering the industry.
The federal government already plays an active funding role for training and upskilling in each province through Labour Market Development Agreements (“LMDAs”) and Workforce Development Agreements (“WDAs”) – every province and territory currently have both LMDAs and WDAs in place. This mechanism can facilitate dedicated funding to the provinces for truck driver training through additional funding and/or direction to the provinces and/or a new unique fund – without requiring new bureaucracy or creating new funding mechanisms. These funding streams
The current cost to the Canadian economy by supply chain disruptions dwarfs any additional cost for the federal government to provide additional funding for this purpose. For example, in March 2022, a Canadian Manufacturers and Exporters survey and reported that manufacturers alone have lost about $10.5 billion in sales because of disruptions in the supply chain and are now experiencing nearly $1 billion in increased costs.
Supply chains issues are not only deep, such as in the manufacturing sector, but also broad – the Business Development Bank of Canada reported in March 2022 that 85% of Canadian businesses were experiencing supply chain issues. Addressing this issue through increasing truck drivers is important for every region and almost every sector.
The Fredericton Chamber of Commerce is presenting a policy resolution at the upcoming national chamber conference, seeking support from the network to push the federal government to work with the provinces to provide dedicated funding through Labour Market Development Agreements and/or Workforce Development Agreements targeted to increase Canada’s truck driving capacity through increased access to truck driver training programs.
While the pandemic has been a factor here, this problem did not begin over the past couple of years. It has been brewing for perhaps decades and will take intentional policy making by government to help reverse this trend. We know inflation is top of mind for government – subsidies and cash infusions will help some in the short term, but if we really want to tame the inflationary monster, we need to ultimately rebuild a solid foundation.
Krista Ross is CEO of the Fredericton Chamber of Commerce, a nationally accredited organization with more than 1,000 members, is an active business organization engaged in policy development and advocacy that affects the competitiveness of our members and the Canadian business environment. The Chamber’s vision is ‘Stronger Community Through Business Prosperity’.