Lethbridge event highlights supply chain issues, brings together local industry

During the first-ever Southern Alberta B2B Trade Show and Conference in Lethbridge, Alta., last week, attendees received an overview of both national and local supply chains, with Canada’s relationship with China taking centre stage.

Trevor Lewington, CEO of Economic Development Lethbridge, said that although tariffs placed on electric vehicle imports from China help protect the domestic economy, they pose a challenge for Alberta.

“Canada is the largest supplier of canola to the world. We are the largest supplier of that commodity and value-added products,” said Lewington. “China is the largest market that takes and consumes canola products, so it’s not a surprise that a few weeks after Canada implemented a 100 per cent tariff on Chinese imports of adhesive battery components, the Chinese government announced a review of Canada’s dumping practices of canola into the global market.”

Lewington believes the turbulent relationship between Canada and China will significantly impact the Canadian economy, as well as the region of Lethbridge, which, he said, has tripled its exports in the last decade.

“When you go back to about 2012, 2013, the Lethbridge region exported about $600 million worth of goods,” he said. “Today, that number is more than $2.2 billion. That’s Lethbridge-manufactured goods, not raw commodities. About 70 per cent of that total is manufactured goods.”

Despite this increase, Lewington said southern Alberta and Lethbridge are becoming more exposed to global trade disruptions.

Brand disloyalty

Lewington also highlighted a PricewaterhouseCoopers (PwC) Canada brand study showing that Canadians are now more willing to switch brands to save money.

“Canadian consumers, believe it or not, are very brand-loyal,” he said. “But in PwC’s most recent survey, what they note is that given current inflationary pressures, consumers are willing to switch brands based on pricing and promotion, which is pretty rare compared to what we’ve seen before. In that survey, 43 per cent of Canadian consumers said they would switch to a competing brand.”

Lewington urged attendees to keep this in mind when making business decisions, as the relationship between businesses and consumers is changing in Canada.

“Almost half of your consumers are quite happy to leave you overnight despite whatever relationship you might have built,” he said. “If price is different, everyone is price-conscious at this moment, and that is driving the conversation.”

Managing global distribution

There is no shortage of disruptions affecting supply chains worldwide—piracy, strikes, lockouts, weather events and even poor driving, resulting in ships blocking canals or hitting bridges.

Lewington said there’s a silver lining to these ongoing issues: how companies are responding.

“The good news for me, as an economic developer, is that many companies with large, global, interconnected supply chains are saying, ‘It’s too much risk,’” he said. “‘We want to reshore, we want to bring manufacturing back to Canada. If our market is in North America, we want to do business here.’”

Locally, Lethbridge has adopted a similar approach by building what it calls a trade corridor with Great Falls, Mont.

“We lovingly refer to it as Canada’s Western Gateway,” said Lewington. “Southern Alberta has the infrastructure. Although we get some crazy weather, it is relatively predictable. It’s seasonal, we know when it’s coming, we don’t get hurricanes and tornadoes are small-scale. We can be a destination for investment. We can be a manufacturing hub, and from here, we can support the entire Pacific Northwest. We have access to different markets, and Canada has access to more free trade agreements than the U.S.

“We’ve seen lots of disruptions. I don’t think any of them are going away anytime soon.”

Trucking disruption

The trucking industry faces its own set of disruptions. Brad Beerling, logistics manager for Alberta and Saskatchewan at Meridian Manufacturing and Armtec, pointed to Driver Inc. as a longstanding issue.

“They are taking advantage of many new Canadians and people who just don’t have the knowledge,” said Beerling. “They hear they’ll be paid as independent contractors, don’t have to pay taxes and can write off expenses. That’s fine until someone gets hurt on the job and finds out they have no WCB coverage.”

Beerling stressed that not only do drivers need to avoid Driver Inc., but those hiring carriers must also be cautious.

“If you hire trucking companies that aren’t safe, and they get into a wreck, you could find out there’s no WCB coverage because it happened under a contractor arrangement,” he explained. “If you hire a subcontractor and they don’t have WCB coverage, you’re left holding the bag.”

Another hot topic in the trucking industry is emissions, particularly the shift from traditional fuel sources to alternatives like hydrogen, which Beerling said has advantages.

“The advantage over electric is that we can actually produce hydrogen here in Alberta, and that’s going to be huge for us,” he said. “We need to push forward to get the infrastructure in place; we need those fueling stations. It’s great that you can buy a truck for half the price with all the grants, but if you can’t fill it up, it doesn’t much matter.”

The Southern Alberta B2B Trade Show and Conference was held on Oct. 10 at the Lethbridge and District Exhibition. It was organized by Wida Procurement and Supply Chain Solutions, which plans to make it an annual event.