Steel support leaves truckers feeling overlooked

The federal government’s decision to subsidize steel shipments moved by rail and marine transportation, while leaving trucking companies out of the program, risks creating an uneven playing field in Canada’s transportation sector, according to trucking industry insiders.

The federal steel-support program provides a 50-per-cent transportation rebate for eligible steel products shipped by rail or marine transportation. But trucking companies, which remain an important link in moving steel from mills, ports and rail terminals to warehouses and customers, are not eligible for the rebate.

Manitoba Trucking Association (MTA) executive director Aaron Dolyniuk said the exclusion is disappointing at a time when the industry is already facing challenging economic conditions.

“All modes of transportation play a vital role in moving goods to local, national, and global markets, and in today’s economic conditions, we need to be doing everything we can to move those goods,” Dolyniuk told the Sun. “No opportunity should be overlooked.”

He said the program could influence shippers’ decisions about how they move steel, particularly when the rebate makes rail or marine transportation more financially attractive.

“There is certainly potential for steel shipments to be shifted away from the trucking industry so shippers can take advantage of this subsidy,” he said.

Trucking continues to offer advantages that could keep some steel shipments on the road, he said.

“Moving freight by truck has advantages, so those shippers who value the service provided by the trucking industry will hopefully continue to do so,” Dolyniuk said.

Transport Minister Steven MacKinnon announced the launch of the $100-million rebate program for the interprovincial transportation of eligible steel products by rail and marine on August 10.

“Global trade is changing quickly, and Canada must adapt. Canadians are looking for more opportunities to buy Canadian products, including Canadian steel. Through this rebate, we’re helping businesses strengthen their presence in the domestic market,” he stated.

Akinwole Omole, a Manitoba truck operator, said the issue is not opposition to supporting Canada’s steel industry or rail and marine transportation.

“From my perspective as a trucking operator, I believe the 50-per-cent transportation rebate for eligible steel moved by rail or marine, while excluding trucking, creates an imbalance in the transportation sector,” Omole told the Sun.

“Steel often still needs to be moved by truck from mills, ports, rail terminals and warehouses to its final destination,” Omole said. “Trucks are therefore an essential part of the same supply chain.”

That role could become more difficult if shippers increasingly choose rail or marine transportation because of the rebate, he said.

“The program could put trucking companies at a competitive disadvantage because shippers may favour rail or marine where the rebate is available,” Omole said.

He expects the effects could be particularly felt in long-haul steel movements in Manitoba and Western Canada, although trucks would continue to play an important role in shorter trips and final-mile deliveries.

“If the program remains unchanged, I expect some trucking businesses could face reduced opportunities and increased pressure on rates over the next six to 12 months,” he said.

Dolyniuk said the MTA would like Ottawa to make trucking an eligible option under the transportation subsidy so shippers can choose the mode that best meets their needs.

“Since this is a shipper-based subsidy, it would be appreciated if trucking were included as a subsidized option for shippers to use,” he said.

“If shippers could choose freely between modes of transportation to move their goods to market, that would be beneficial to everyone involved in goods movement.”

The MTA has raised concerns through the Canadian Trucking Alliance, the national trucking organization of which the Manitoba association is a member, he said.

Dolyniuk said the association’s broader concerns extend beyond the steel-support program.

Eliminating the practice commonly known as “Driver Inc.” and increasing enforcement budgets and efforts are measures that could have a significant impact on Manitoba’s trucking industry, he said.

Omole also wants Ottawa to either expand the existing program or introduce another form of support recognizing trucking’s role in the steel supply chain.

“The objective should be to strengthen Canada’s steel industry without creating an artificial advantage for one transportation mode over another,” he said.

For Manitoba’s trucking industry, the concern is that a policy intended to strengthen one part of the Canadian supply chain could inadvertently place pressure on another.

While rail and marine transportation can move large volumes of steel over longer distances, truckers argue that their role does not end when steel leaves a mill, port or terminal. They remain responsible for connecting those transportation networks with warehouses, businesses and customers.

Ensuring all modes can compete on an equal footing, Dolyniuk said, would ultimately give shippers greater flexibility while supporting the broader movement of Canadian goods.

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