Your Daily Bread Will Now Come From Fewer Hands

MONOPOLY CAPITALI$M USING WORKERS CAPITAL

Analysis by Javier Blas | Bloomberg
June 13, 2023 
(Source: Bloomberg research and company reports)

It hardly generates headlines, but it puts your daily bread on the table. 

The grain-trading industry is one of the most inconspicuous — and yet crucial — businesses powering the global economy. And it just witnessed its biggest shakeup in a generation.

Bunge Ltd., a US-based food trader and processor, is buying rival grain trader Viterra, which is controlled by commodity behemoth Glencore Plc and two Canadian pension funds. 

The price tag is $8.2 billion in shares and cash, plus debt. When the deal closes, likely in 2024, Bunge’s shareholders would control about two-thirds of the company, and Glencore and the Canadians the rest.

The resulting entity would become the world’s second-largest agricultural trading company by revenue, dominating the soybean and wheat markets. It’s a consolidation that should concern antitrust regulators — and worry anyone who eats or farms.

For the last quarter of a century, four companies have largely controlled the agricultural market. The quartet comprises Archer-Daniels-Midland Co., Bunge, Cargill Inc., and Louis Dreyfus Co. — or “ABCD” for short. 

Now the “B” is getting a lot larger, overtaking the “A”, and only trailing the “C”; the concentration has boosted margins, particularly in the last couple of years, when record earnings were the norm.

Cargill became the king of agricultural commodities by buying another “C,” in this case the grain-trading business of Continental Grain Co. in 1998 for about $450 million, plus inventories and debt. 

It was the last big industry shakeup and one that prompted regulatory scrutiny. Ultimately, the US Department of Justice forced Cargill to sell some assets, arguing that without the remedy, “many American farmers likely will receive lower prices for their grain and oilseed crops, including corn, soybeans, and wheat.”

Antitrust regulators should take a similarly aggressive approach 25 years later.

 Crucially, the Bunge-Viterra merger isn’t just two companies getting together, but, in reality, four of them. That’s because Viterra is the product of an M&A race that started in 2012 when Glencore bought the original Viterra for about $6 billion. 

Soon after, in 2016, Glencore spun off the enlarged business, attracting two Canadian pension funds that took almost half of the shares. The new entity kept the Viterra name and bought US-based trader Gavilon in 2022 for about $1.1 billion.

Together, Bunge plus Glencore-Viterra-Gavilon would have had revenue of about $140 billion last year, above the $102 billion of Archer-Daniels-Midland, and just under Cargill’s $165 billion. 

Adjusted net income would have been around $3 billion, and underlying earnings, excluding interests, taxes and depreciation, would have come in close to $5.5 billion.

Bunge and Viterra claim that their geographical footprint is complementary, with little overlap. That’s technically true, but only if regulators consider, for example, the US and Canada as separate markets, or that Argentina and Brazil have little in common. 

I doubt regulators would take such approach.

“We’ll have to file in a number of jurisdictions, because of the footprint of both companies. I will never predict regulatory timelines,” Greg Heckman, Bunge’s chief executive officer, told shareholders in a conference call after the deal announcement. “We will see how it plays out.”

Both Bunge and Viterra are important for China, and Beijing will also likely take a hard look at the deal. China is trying to expand its own state-controlled global grain trader.

It isn’t just horizontal consolidation, over geography, but also vertical, up and down the supply chain. Bunge is more weighed toward processing, and Viterra towards trading.

Together, they would control a larger share of the path from farm to fork. 

Farmers and the food companies that are the clients of the traders would all have significantly less choice going forward.

The Bunge-Viterra deal makes sense from a business perspective, even if the former is buying the latter at the top of the cycle. But it requires robust due diligence from regulators. 

Last year, the International Monetary Fund described the commodity-trading industry as one of those “corners of global financial markets that were little known by the broader public.” 

That should not be the case.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Javier Blas is a Bloomberg Opinion columnist covering energy and commodities. A former reporter for Bloomberg News and commodities editor at the Financial Times, he is coauthor of “The World for Sale: Money, Power and the Traders Who Barter the Earth’s Resources.”

CPP Investments to Acquire 12% Position in Bunge through Viterra Merger


NEWS PROVIDED BY

Canada Pension Plan Investment Board

13 Jun, 2023, 06:35 ET

CPP Investments holds a 40% equity stake in Viterra

TORONTO, June 13, 2023 /CNW/ - Canada Pension Plan Investment Board (CPP Investments) today announced it has signed a definitive agreement in support of the proposed merger between Viterra and Bunge (NYSE: BG), an agriculture, commodities and food company. Through this transaction, CPP Investments will receive an approximate 12% equity position in the combined company and US$0.8 billion in cash upon the close of the transaction. CPP Investments has held a 40% investment in Viterra since 2016.

Bunge is a leader in oilseed processing and a significant global producer and supplier of specialty plant-based oils and fats. Viterra is a leading, global agriculture network, which connects producers to consumers with sustainable, traceable, and quality-controlled agricultural products. Together, the agribusinesses have highly complementary capabilities and footprints, and together will be able to better serve customers from an enhanced global network and increased diversification across geographies, seasonal cycles and crops.

Glencore and British Columbia Investment Management Corporation, who jointly own the other 60% of Viterra, will also become shareholders of Bunge.

"Since 2016, CPP Investments has supported Viterra on its journey to becoming a leading global agriculture business. We are pleased to support the business in its next phase of growth through this merger with Bunge," said Bruce Hogg, Managing Director, Head of Sustainable Energies, CPP Investments. "Combining these two highly complementary companies will create an enhanced agribusiness that can provide an expanded product offering to end-customers, with an increased ability to innovate and promote sustainable practices in the global food supply."

The transaction is expected to close in mid-2024, subject to the satisfaction of customary closing conditions, including receipt of regulatory approvals and approval by Bunge shareholders.

The Sustainable Energies group pursues investments in renewable and conventional energy, carbon capture, distributed and energy services, emerging and disruptive technologies, as well as agriculture. As at March 31, 2023, the Sustainable Energies group portfolio totalled C$32 billion in net assets.
About CPP Investments

Canada Pension Plan Investment Board (CPP Investments™) is a professional investment management organization that manages the Fund in the best interest of the more than 21 million contributors and beneficiaries of the Canada Pension Plan. In order to build diversified portfolios of assets, investments are made around the world in public equities, private equities, real estate, infrastructure and fixed income. Headquartered in Toronto, with offices in Hong Kong, London, Luxembourg, Mumbai, New York City, San Francisco, São Paulo and Sydney, CPP Investments is governed and managed independently of the Canada Pension Plan and at arm's length from governments. At March 31, 2023, the Fund totalled $570 billion. For more information, please visit www.cppinvestments.com or follow us on LinkedIn, Facebook or Twitter.

Viterra-Bunge Merger Proposal Backed by Canadian Pension Funds

Paula Sambo, Bloomberg News

Workers unload soybeans at a Viterra grain elevator near Rosser, Manitoba, Canada, on Friday, March, 18, 2022. The United Nations warned that already record global food costs could surge another 22% as the war in Ukraine stifles trade and slashes future harvests. , Bloomberg

(Bloomberg) -- A merger between Glencore Plc’s Viterra unit and Bunge Ltd. to create a $25 billion agricultural trading behemoth has the support of two of Canada’s biggest pension funds, according to a person with direct knowledge of the matter.

Canada Pension Plan Investment Board and British Columbia Investment Management Corp. are willing to swap their combined 49.98% stake in Viterra for investments in the merged entity, said the person who asked not to be named discussing a private deal.

Spokespersons for the two pension fund managers and Viterra declined to comment.

A merger would create a trader big enough to take on the industry’s elite: Cargill Inc. and Archer-Daniels-Midland Co. Viterra and Bunge are negotiating the structure of a potential transaction, Bloomberg reported last week. One option being discussed envisions a stock deal where Bunge shareholders would own a majority of the combined group, according to the people.

Read More: Bunge-Viterra Deal Would Create $25 Billion Rival to Cargill

Glencore has flirted with the idea of a deal with Bunge on and off for years, and there’s no certainty it will be able to reach an agreement this time around. In 2017, the Swiss commodities giant approached Bunge about a friendly takeover, but was publicly rebuffed by the US firm. Since then, Bunge has replaced its new chief executive officer and other senior executives.

Canada’s Globe and Mail newspaper reported Monday that the Canadian pension funds would almost certainly swap their stakes for a stake in Bunge, citing people close to deal talks. Glencore Plc, with a 49.99% stake, would do the same, the newspaper reported.

--With assistance from Isis Almeida and Layan Odeh.

(Updates with background details in fourth paragraph)

©2023 Bloomberg L.P.

 

Viterra

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From Wikipedia, the free encyclopedia

Viterra

Type	Privately Held
Industry	Agriculture
Founded	1993
Headquarters	Rotterdam, Netherlands
Key people	Kyle Jeworski
Website	www.viterra.com

Viterra began as a Canadian grain handling business, the nation's largest grain handler, with its historic formative roots in prairie grain-handling cooperatives, among them the iconic Saskatchewan Wheat Pool.^[1] Viterra Inc grew into a global agri-business with operations in Canada, the United States, Australia, New Zealand and China. Viterra operated three distinct, inter-related businesses: Grain Handling & Marketing, Agri-Products and Processing, enabling it to generate earnings at various points on the food production chain from field to the table. Following its $6.1-billion acquisition by Glencore International, on 1 January 2013, Viterra was merged with Glencore purchaser, 8115222 Canada Inc.,^[1] headquartered in Rotterdam, the Netherlands.

Viterra's grain handling and marketing operations were located primarily in two of the world's most fertile regions: Western Canada and South Australia. The company owns and operates grain terminals in Western Canada, along with 95% of the grain handling and storage facilities in South Australia. The company ships grain to markets worldwide.^[2]

Viterra was also one of the largest agri-product retailers in Canada, with a network of more than 250 retail locations throughout the Prairies. As part of this business, Viterra owned a 34% interest in Canadian Fertilizer Limited CFI, a large urea and ammonia plant.

The company also operated several value-added processing businesses, including wholly owned subsidiaries like Dakota Growers Pasta Company, 21st Century Grain, making it the largest producer of industrial oats in North America, the third largest producer of pasta on the continent, the largest malt producer in Australia, a large producer of canola and a leading producer of animal feed in New Zealand.

At the time of the Glencore's March 2012, back-to-back purchase-and-agreement of Viterra's assets to Agrium, which paved the way for Glencore's purchase of Viterra, in December 2012, Viterra was generating "$2.4-billion in revenue and $244-million in EBITDA" and operated a "network of 258 agri-products retail locations throughout Western Canada and 17 retail locations in Australia. Retail locations offer fertilizer, crop protection products, seed and equipment to growers. Viterra also has a minority interest in a nitrogen fertilizer manufacturing plant in Medicine Hat, Alberta."^[3]

History[edit]

Viterra Inc. was formed in 2007 as a publicly traded corporation when the Saskatchewan Wheat Pool acquired Agricore United, which was at that time the largest grain handler in Western Canada. Viterra's predecessors were the grain-trading co-operatives set up in Canada during the 1920s known as the wheat pools. It has since acquired the former Australian government-sponsored monopsony marketing board, the Australian Barley Board, created in 1939.

Grain Growers Grain Company (1906-2008)

Saskatchewan Cooperative Elevator Company (1911–1926)

United Grain Growers (1917–2001)

Saskatchewan Co-Operative Wheat Producers (1923–1953)

Alberta Wheat Pool (1923–1998)

Manitoba Pool Elevators (1926–1998)

Australian Barley Board (1939–1999)

Sask. Wheat Pool (1953–2007)

Agricore (1998-2001)

AusBulk formerly South Australian Cooperative Bulk Handling (SACBH) (?-2004)

United Grower Holdings (?-2004)

Agricore United (2001–2007)

ABB Grain (1999–2009)

VITERRA (2007-2013)

 

Mergers

Viterra building near Fort Road in Edmonton, Alberta.

On 19 May 2009, Viterra announced it would buy Australian ABB Grain for C$1.4 billion.^[4] On 9 September, 84 percent of ABB shareholders voted in favour of the merger, with 75 percent required to pass the resolution.^[5]

On March 15, 2012, Viterra announced that it had received takeover offers from multiple parties.^[6] Glencore was revealed to have offered a takeover bid of $6.1 billion.^[7] It intended to immediately sell off its Canadian assets to Agrium and Richardson International while retaining Viterra's overseas assets.^[8] The takeover deal was completed in December 2012.^[9]

Following Glencore's takeover of Viterra in December 2012, Viterra underwent some major changes. Viterra Inc. (Viterra) was acquired by a Glencore purchaser, 8115222 Canada Inc. and merged under the Canada Business Corporations Act (CBCA). The new board of directors includes Mr. Chris Mahoney (Director of Agricultural Products of Glencore), Mr. Ernest Mostert (Financial Manager of Glencore Grain), Mr. Robert Wardell and Mr. Larry Ruud (President & CEO One Earth Farms Corp).^[10]

In preparation for Glencore's acquisition of Viterra in December 2012, in March 2012, Agrium Inc entered into a $1.15bn sale agreement with Glencore, who in this way divested "90 percent of Viterra’s Canadian retail facilities, all of its Australian retail facilities, as well as their minority position in a nitrogen facility located in Medicine Hat, Alberta."^[3]

In 2016, Glencore sold a minority stake in the business to the Canada Pension Plan, who paid "US$2.5 billion for a 40 percent stake" in its global agricultural assets, by then renamed "Glencore Agriculture".^[11]

In 2020, Glencore Agriculture rebranded to Viterra and created a new brand identity, building off the Viterra brand that was created in 2007.^[12]

In 2022, Gavilon was purchased by Viterra for $1.1 billion. It is expected Gavilon will be fulling integrated in Viterra by early 2023.^[13]

In 2023, a merger with Bunge Limited was announced.^[14]

PSAC  STRIKE

From the Picket Line: What’s at Stake in the Big Strike

Workers discuss public perceptions of ‘cushy government jobs.’ Experts eye a path to a deal.

Zak Vescera 

25 Apr 2023

TheTyee.ca
Zak Vescera is The Tyee’s labour reporter. This reporting beat is made possible by the Local Journalism Initiative.
‘I do worry about being able to just afford my home and whether I’m going to be able to keep making those payments,’ says PSAC member Damir Moric. Photo by Zak Vescera.


Workers on the frontline of Canada’s largest strike in decades say their finances and careers could hinge on the outcome of the escalating labour dispute.

More than 100,000 federal workers went on strike last week after negotiations between the Public Service Alliance of Canada and the government hit an impasse over salaries and whether workers should have the right to remote work enshrined in the collective agreement.

The union has asked for 13.5 per cent over the three-year agreement, which would be retroactive to late 2021 when their last contract expired. The Union of Taxation Employees, which represents more than 35,000 workers at the Canada Revenue Agency, have asked for an increase of 20.5 per cent, on top of a one-time nine-per-cent raise.

The federal Treasury Board’s last public offer to both units was nine per cent.

On a rainy picket line in Vancouver, Matthew di Nicolo said stereotypes about federal public servants mask the realities of the job.

“If they had these cushy government jobs where they pay you to sit around, I’d love one of those,” said di Nicolo, who processes unemployment claims. “If they were offering those, I’d take one in a heartbeat, because that’s not my experience.”

The PSAC’s membership spans 155,000 government workers. They handle tax claims, cook meals for the military and inspect and maintain fisheries on B.C.’s coast, among other things.

The union says just under a quarter of those members earn between $40,000 and $60,000 a year and that almost 60 per cent are earning less than $70,000. PSAC says about 20 per cent are earning more than $80,000 a year.

Damir Moric says the wages used to be enough to get by. But now, he’s facing higher interest payments on his mortgage and rising costs as inflation spiked in 2022.

“I do worry about being able to just afford my home and whether I’m going to be able to keep making those payments,” Moric said. “It was adequate for me starting out. Now I’m not able to really make it.”

Moric and di Nicolo were among dozens of PSAC members at a picket line in downtown Vancouver on Friday. Many huddled under archways for shelter or crowded around a folding table overflowing with Tim Hortons’ doughnuts and lukewarm coffee.

Others paced around in the rain, carrying white placards that said “2% is for milk,” a reference to part of the government proposal.

At another picket line up the street, a group of bemused strikers watched as a dark blue sports car was towed away. Members are receiving $75 a day in strike pay.

The PSAC has picketed more than 250 locations across the country, the union says, and is now also stopping work at some federal ports to ratchet up pressure at the bargaining table.

On Monday PSAC members began picketing the Cascadia Terminal on East Vancouver’s waterfront, halting work at one of the country’s largest export grain terminal.

Milton Dyck, president of PSAC’s agriculture union, said the union plans to picket more locations if a deal isn’t reached, part of a broader plan to ratchet up economic pressure on the government.

“We’re not trying to close the entire port down. But we want to start selectively choosing parts here and there,” Dyck said.

“What we’re going to be doing is we’re going to be hitting different spots and scaling up.”

PSAC president Chris Aylward and the federal government traded accusations this weekend about who was responsible for the pace of talks. Aylward said the union was willing to target “strategic locations,” including ports.

The union can legally picket grain terminals because roughly 290 of its members work at the Canadian Grain Commission and are in a legal strike position, including workers at Cascadia. Dyck said other union workers at that terminal, including the Grain Workers Local 333 and the International Longshore and Warehouse Union, respected the picket line.

Dyck said his goal is a fair deal for his members, who he said are often asked to do overtime because of staff shortages across the grain commission. But the Western Canadian Wheat Growers Association worries the union’s plan could inflict economic pain on farmers. Association president Gunter Jochum said lengthy delays at grain ports could back up supply chains, increasing costs and potentially hurting Canadian grain prices.

“The companies will just pass that cost up down the line and it ends up at the lowest common dominator, which is the farm,” Jochum said.

The Canadian Grain Commission, which regulates the handling and export of those crops, says exports are still flowing. Spokesman Rémi Gosselin said the commission was allowing grain companies to collect samples on the commission’s behalf. Gosselin said those samples were then being tested and evaluated by commission managers so they can still be exported during the strike.

PSAC represents roughly 65 per cent of the commission’s employees, Gosselin said, something he said has had a “significant” impact on their operations. “We totally respect our employees’ right to strike, but at the same time we have a mandate to fill,” Gosselin said.

Jochum has called for the federal government to allow private inspectors to do the work, something PSAC would likely viscerally oppose, since those workers would need to cross picket lines and would undercut their pickets.

The Cascadia Terminal is jointly owned by agriculture giants Viterra and Richardson International and has more than 280,000 metric tonnes of storage space for canola, barley and other grain. A Viterra spokesperson declined to comment on the picket line when contacted on Monday.

.

Milton Dyck, president of PSAC’s agriculture union, said the union would expand pickets at grain terminals that are critical to exports. Photo by Zak Vescera.


PSAC president Chris Aylward and the federal government traded accusations this weekend about who was responsible for the pace of talks. Aylward said the union was willing to target “strategic locations,” including ports.

University of Saskatchewan political science professor Charles Smith said the PSAC doesn’t have a tradition of labour militancy.

He said the strike is part of a larger period of labour upheaval sparked by high inflation, rising interest rates and low unemployment rates that have made workers seek better working conditions and in a strong position to get them. The COVID-19 pandemic, Smith said, likely amplified that since many public federal workers were asked to continue reporting for work and launch new programs in a period of uncertainty.

“The PSAC were asked to do a hell of a lot of work in a way they were not trained for and get the job done, and they did,” Smith said.

Public opinion on the strike appears to be slightly favourable towards PSAC. An Angus Reid poll conducted last week found 48 per cent of respondents supported the union’s wage requests, compared to 40 per cent who opposed it and 12 per cent who were unsure. The online poll was conducted among a representative randomized sample of 1,276 people and had an estimated margin of error of 3 per cent, 19 times out of 20.

Mark Thompson, a professor emeritus at the University of British Columbia’s Sauder School of Business, said federal public servants typically are not as sympathetic to the public as their provincial counterparts, who are often more visible and provide more direct services.

“Not very many of us have direct interaction with federal people. And it’s not always something that we relish. If you cross the border and you want to wait in line, you just want to get it over with,” Thompson said.

Matthew di Nicolo says any perceptions of cushy government jobs don’t reflect reality. Photo by Zak Vescera.

But he said the federal government’s wage proposal was likely too low to secure a deal. Most provincial public servants in B.C., for example, secured a wage increase of between 10.74 to 12.74 per cent over three years for most positions, with the final total depending on the rate of inflation in the years of the agreement.


A Freedom Denied Canadian Workers

READ MORE

Thompson said the most interesting part of the dispute is remote work. Many federal servants began working from home during the COVID-19 pandemic and did not return to the office until this year, when the Treasury Board set a requirement for employees to report to work in person at least twice a week. In a statement, the government said it made that decision because working in-person “supports collaboration, team spirit, innovation and a culture of belonging.”

PSAC now wants the right to remote work enshrined in collective agreements, something that has been controversial in other organizations.

In B.C., the government resisted requests from unions to guarantee remote working privileges in collective bargaining last year, leaving it up to managers to decide. But the province has also signalled it wants to be flexible about remote work and that it wants more workers in different regions of the province outside Victoria and Vancouver.


‘These Workers Have Proven Their Worth Time and Again’

READ MORE

Vanessa Radunz, who works in procurement services for the federal government, says being able to work remotely has saved her hours of commuting each day on transit plus associated costs. She says she is able to do her job — which involves helping multiple federal departments buy anything they might need — from home with ease.

“It’s an extra two hours a day. You have to set all your equipment up, troubleshoot any technical things, pack it all up at the end of the day and go home,” said Radunz.

But the biggest sticking point on the picket line is still wages. The federal Treasury Board has said the union’s requested pay increases are unreasonable and that its revised offer of nine per cent reflects the recommendations of a Public Interest Commission Report. The reports are part of the process in federal labour negotiations.

Steve Claxton, a supervisor who has worked for the government for 24 years, says salaries have become less competitive over time compared to the private sector or working for the provincial government. He said many of his colleagues also worked extensive overtime at the start of the COVID-19 pandemic, he said, and were hopeful the next collective agreement would acknowledge that contribution.


Why 2023 Could Be the Year of the Union

READ MORE

“No one knew what the pandemic was going to end up like or how dangerous it was at the time, and they came in every day without a contract,” Claxton said.

Di Nicolo joined the public service in 2019 before the COVID-19 pandemic began. He met some of his colleagues for the first time in person on the picket line. During the pandemic, he said, he worked overtime hours to stand up the Canada Emergency Response Benefit for the millions of workers who lost their jobs in the first months of the pandemic.

“During the pandemic we got a lot of kinds words. They were saying, ‘You guys are doing a lot of work, you’re essential.’ And then two years later we’re looking for a cost of living adjustment and we’re not getting it,” Di Nicolo said. “The words are great, but I cannot buy groceries with some kind words.”

PSAC: Remote work demands helping drag out Canada civil-service strike

Randy Thanthong-Knight, Bloomberg News

The right to work from home is one of the key outstanding issues at the center of negotiations to end one of Canada’s largest strikes. 

More than 155,000 civil servants have been on strike since Wednesday to demand higher wages from Prime Minister Justin Trudeau’s government, the country’s largest employer. In addition to better pay and a right to work remotely, they’re also pushing for a ban on contracting out jobs and a requirement that seniority be respected during layoffs.

Entrenching the right to work-from-home could set an important precedent in Canada, for both public and private sectors, as workers call for more flexible arrangements while employers try to push back or impose hybrid requirements. Any return to something resembling the full-remote-work model seen during the early months of the Covid-19 pandemic would have major ramifications on real estate in major cities, as well as downtown businesses. 

 “We have proposed to review, jointly with unions, the current telework directive,” Mona Fortier, president of the Treasury Board, said in an open letter on Monday. “The directive has not been re-assessed for a post-pandemic world, so a formal review would help ensure that our approach is modern, fair, and supportive” for our employees.

Last October, business groups warned that government departments were lagging “significantly” behind the private sector in bringing employees back to offices — particularly in the Ottawa-Gatineau area that is home tens of thousands of federal workers. 

The government said the Public Service Alliance of Canada, the country’s largest federal-worker union representing the Treasury Board and Canada Revenue Agency workers who are staging a nationwide strike, came to the table with more than 570 demands, and that it has managed agree “on most of them” during negotiations. 

Still, the union said despite some headway on remote work and wage increases, it’s “not there yet.” It threatened to escalate its demonstrations, particularly at ports, as a result.

The strike has resulted in a delay or pause in several government services. Impacts at key agencies include: 

• Some Agriculture and Agri-Food Canada programs and services may be affected, including research centers, poultry and wine sector programs, as well as a youth employment program
• There will be delays in processing some income tax and benefit returns at Canada Revenue Agency, particularly those filed by paper
• At Employment and Social Development Canada and Service Canada, services will be partially or fully disrupted including the temporary foreign worker program, job banks and biometrics collection
• Delays are expected for Immigration, Refugees and Citizenship Canada citizenship events, passport services, grants and contributions services, as well as immigration-related appointments and applications processing
• Transport Canada’s regulatory work, aircraft services, issuance of licenses, certificates or registrations, and the complaints and recalls hotline are expected to be partially or fully disrupted
• The public may also have trouble accessing some Government of Canada buildings where services are delivered 

Civil servants’ push for remote work has Canadian employers watching anxiously

Randy Thanthong-Knight, Bloomberg News

Canada’s government is grappling with what comes after the “forced experiment” of remote work brought on by the pandemic as it negotiates with striking civil servants, the country’s labour minister said. 

More than 155,000 federal employees launched one of the country’s largest strikes a week ago in a dispute that primarily focuses on wages and enshrining the right to work from home. 

With talks at a standstill, the union has escalated its demonstrations, targeting major ports for exports of grain and other commodities. While that’s prompted calls from industry for the government to step in, Labour Minister Seamus O’Regan declined to comment on the status of negotiations. 

Though O’Regan said the government doesn’t dictate what works for other employers or sectors, a deal that cements a right to remote work may set a precedent. If the civil servants are successful, it may strengthen the negotiating leverage of workers in other sectors to push back against employers who favour a return to office.

“The government as an employer is trying to figure it out. We as a society are trying to work this out,” O’Regan said in an interview at his Ottawa office. “We had a crazy forced experiment of remote work imposed on us. There are some workers who had no choice but to go to work. There were a lot of people who didn’t have to go anymore, and yet we functioned and our economy got through it.”

When most COVID-19 restrictions were lifted, employers started mandating a return to office or hybrid work, saying that it would foster collaboration and boost productivity. But some workers are eager to keep the autonomy and flexibility they enjoyed during the pandemic lockdowns.

LIKELY PRECEDENT

The Public Service Alliance of Canada is demanding that the arrangement be included in a new collective agreement. If that happens, it has the potential to influence the outcome of future talks between unions and provincial governments, municipalities, and even private-sector businesses. 

About a dozen clients who are currently negotiating collective agreements have already asked to delay the process to see the eventual deal from Prime Minister Justin Trudeau’s government, according to Patrick Groom, a labor lawyer at McMillan LLP in Toronto. 

“This is going to set the standard for collective-bargaining negotiations and employee expectations, even in non-union environments across the country,” Groom said. “If the federal government agrees to working from home arrangements, that’s going to be a serious and difficult challenge to overcome for employers who want to have their workforces return.” 

Employee resistance has left many business districts from Toronto to New York and San Francisco much emptier than in pre-COVID times. That’s been particularly acute in Ottawa, where more than 45% of workers were still working from home last year, compared with a national average of about 25%, according to Statistics Canada.   

In an open letter earlier this week, Treasury Board President Mona Fortier — the cabinet minister who’s leading the talks for Trudeau — said the government has proposed to review the current telework directive jointly with unions to “help ensure that our approach is modern, fair, and supportive” for employees.

“We value our workers. We’re like any other firms out there. We want make sure that we retain them,” O’Regan said. “The government has a vested interest in making sure that it gets the best employees at the best value for the taxpayer. I’m very hopeful that we’ll land in a good place.”

Farmers grow concerned as striking PSAC workers block grain exports

By David George-Cosh

David George-Cosh

Reporter

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Some Canadian farmer groups are becoming increasingly concerned about the economic impact on the country’s agricultural sector after striking federal workers blocked grain exports across several Canadian ports earlier this week.

Union workers from the Public Service Alliance of Canada (PSAC) picketed the Cascadia Terminal in Vancouver on Monday, preventing grain exports from receiving their final inspection before being shipped overseas. Federal workers also picketed outside Thunder Bay, Ont. and Montreal ports, according to Milton Dyck, president of the Agricultural Union within the PSAC.

More than 100,000 federal workers walked off the job last week after failing to negotiate a new contract with the Treasury Board amid a dispute over wages and remote work. Economists estimated that the strike could see between a 0.2 per cent to 1 per cent hit to Canada’s gross domestic product in April, depending on how long the job action lasts.

The Wheat Growers Association, an industry trade group that represents Western Canadian farmers, said in a statement on Tuesday that it was “stunned” to learn that PSAC workers intentionally targeted the Cascadia Terminal and disrupted grain exports. 

“A strike is one thing, but to intentionally target a port that is critical to the lives of grain farmers and to the entire Canadian economy is the height of reckless irresponsibility,” said Wheat Growers president Gunter Jochum in a statement. “It’s time for the federal government to intervene.”

The Wheat Growers added that the Canada Grain Act needs to be amended to allow more third-party grain inspectors to handle grading and weighing services to avoid “double inspections.” It noted that Canadian farmers pay over $60 million per year to have staff from the Canadian Grain Commission inspect grain exports.

The Agricultural Producers Association of Saskatchewan (APAS) also issued a statement on Tuesday urging the Minister of Agriculture and Agri-Food Canada Marie-Claude Bibeau to come to an agreement with the federal workers to avoid prolonging any additional impact the strike would have on farmers.

“Delayed inspections will cause backlogs at ports. Every day a ship must wait means demurrage charges to grain companies, and these costs always make their way to the farmer,” said Ian Boxall, president of the APAS, in a statement.

In an interview with BNN Bloomberg, Dyck said that Canadian Grain Commission inspectors should be considered essential workers and are key to ensuring that Canada’s grain exports meet the high-quality standards sought after by importing nations. While he acknowledged that some farmers will likely see additional costs from demurrage charges being passed to them, those are not as significant as what the trade groups are suggesting.

“I can’t see why the costs would be onerous from one day of blocking the port,” he said.

The grain export dispute comes as Statistics Canada issued its latest outlook on farmer crop planting for this year’s harvest with 27 million acres of wheat expected to be planted, an increase of six per cent from 2022 and the biggest amount since 2001. Wheat prices have fallen by nearly 50 per cent since reaching all-time highs in 2022, while they’re up about 16 per cent from pre-pandemic levels.