Fight Inflation By Training More Truckers
Krista Ross is the CEO of the Fredericton Chamber of Commerce.
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. Those breakdowns are themselves 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, too few 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 insufficient financial support provided for such trainees.
In the fall of 2021, the Canadian Trucking Alliance (CTA) reported approximately 23,000 vacancies for truck driving positions throughout Canada. The alliance estimated 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 percent of available freight loads don’t have a truck (driver) for transport.
What was an issue before the 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 recently experienced our favourite products not being available at the grocery store, or had to wait a few extra days to repair a vehicle because the part 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 solutions must 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 cost 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 a 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 percent of the cost of tuition for these programs. This gap can be a significant barrier for many 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”)– and every province and territory has both LMDAs and WDAs in place. This mechanism can facilitate dedicated funding to the provinces for truck driver training through additional funding, direction to the provinces, and a new unique fund – without requiring new bureaucracy or creating new funding mechanisms.
The current cost to the Canadian economy from supply chain disruptions dwarfs any additional cost for the federal government to provide additional funding for this purpose. For example, in March of 2022, a Canadian Manufacturers and Exporters survey 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 chain issues are not only deep, like in the manufacturing sector, but also broad; the Business Development Bank of Canada reported in March 2022 that 85 percent of Canadian businesses were experiencing supply chain issues. Addressing this issue by 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 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 governments. Subsidies and cash infusions will help some in the short term, but if we want to tame the inflationary monster we must rebuild a solid foundation.
Huddle publishes commentaries from groups and individuals on important business issues facing the Maritimes. These commentaries do not necessarily reflect the opinion of Huddle. To submit a commentary for consideration, contact editor Mark Leger: [email protected].