With the CN strike about to enter day three, the president of the Canadian Propane Association (CPA) says the province of Quebec is about to enter into a crisis situation, with Ontario not far behind.
Quebec heavily relies on the the railroad to bring its supply of propane — 83 per cent is transported via the rail line. In Canada, overall, 63 per cent of propane moves on the tracks, with the remainder transported by truck.
According to Nathalie St-Pierre, president and CEO of the CPA, by the end of the day on Wednesday, 80 per cent of Quebec’s propane reserve will be used up.
“I think Quebec estimates that by Thursday they’re going to be in a crisis situation … they expect it to be down to 20 per cent so (the Quebec government) is urging both parties to reach a negotiation just like we are,” she says.
The supply shortfall is being caused by numerous factors — demand spikes from cold weather, farmers needing to dry grain, and a rail strike that has yet to be resolved.
St-Pierre can’t recall the last time an accumulation of factors have caused such a shortfall of the product.
“It’s interesting because there’s been a number of times where we’ve learned about the potential of a strike or there will be a strike, but then the last time it was resolved before there was actually strike action,” she says, adding that a strike causing this level of impact on the movement of propane will be a first for the industry.
Quebec’s neighbouring province, Ontario could potentially be on the verge of a short supply as well, due to its distance from supply.
“The closer you live to the source of the product out west (the easier) you’re able to get the product (compared to living in the east) where you’re having to get it from rail from Ontario all the way to Quebec, through to Quebec to Atlantic Canada,” St-Pierre says.
“In Ontario, it’s very difficult, obviously there’s no rail delivery, and infrastructure is really strong in terms of the rail delivery to get those volumes available across the province … you can go get it in Sarnia, Ont. by truck, but there’s line-ups, and some are having to wait up to six hours just to get loaded.”
She says CPA is even hearing of instances where ag retails are recommending farmers not take their crop off the field, due to not being able to get the propane they need to dry it.
For areas where propane is being rationed, there are different tiers to determine how the supply is divided. Tier one, top priority, include hospitals; water treatment plants; places with major infrastructure or key services; and homes, according to St-Pierre. She says agriculture would fall into a lower level tier, unless the propane is needed to heat a barn with livestock in it.
“It’s very difficult for anyone distributing propane or selling propane to make those decisions because they’re all your customers and that’s not what they signed up for,” she explains.
Even if there’s an agreement reached and the strike is over, St-Pierre expects there to be a backlog for a while because of the number of railcars sitting on the tracks.
“Railcars are parked here and there, just about everywhere because it was a commodity that was moving with retailers making sure they have enough supply…on average in the winter there could be per month, up to 12,500 on the rail with propane,” she says. “So imagine that being stalled, and having other railcars filled with other commodities, so by the time all of this is all sorted out, and you start making sure that your delivering on all those products, it’s going to take a while.”
St-Pierre expects the supply of propane in southern Ontario and near Quebec to dwindle if the strike persists.
Minister of Employment, Workforce Development and Labour Patty Hajdu says both herself and the Minister of Transport, Marc Garneau, are urging both parties to continue their negotiations.