{"id":293161,"date":"2016-02-29T15:20:52","date_gmt":"2016-02-29T20:20:52","guid":{"rendered":"https:\/\/policyoptions.irpp.org\/2016\/02\/the-role-of-transportation-networks-in-moving-canadian-trade\/"},"modified":"2025-08-28T15:25:47","modified_gmt":"2025-08-28T19:25:47","slug":"the-role-of-transportation-networks-in-moving-canadian-trade","status":"publish","type":"post","link":"https:\/\/policyoptions.irpp.org\/fr\/2016\/02\/the-role-of-transportation-networks-in-moving-canadian-trade\/","title":{"rendered":"The role of transportation networks&nbsp;in&nbsp;moving Canadian trade"},"content":{"rendered":"<p>The efficiency and reliability of a country\u2019s transportation networks are key drivers of international competitiveness, and can help expand global trade and attract foreign investment. This is particularly true with the emergence of a \u201c<a href=\"https:\/\/irpp.org\/wp-content\/uploads\/2015\/04\/AOTS6-van-assche.pdf\" target=\"_blank\" rel=\"noopener noreferrer\">supply chain mindset<\/a>\u201d as production processes become more international.<\/p>\n<p>In this latest <a href=\"https:\/\/irpp.org\/research-studies\/aots6-roy\/\" target=\"_blank\" rel=\"noopener noreferrer\">chapter<\/a>, Jacques Roy (HEC Montr\u00e9al, Professor of Logistics and Operations Management), examines the role of Canada\u2019s transportation infrastructure in moving goods in and out of the country by four key transportation modes: road, rail, sea and air.<\/p>\n<p>Overall, he finds that Canada\u2019s transportation and logistics networks perform reasonably well compared with other countries. But he identifies several areas for improvement, namely for:<\/p>\n<ul>\n<li><em>roads:<\/em> domestic congestion;<\/li>\n<li><em>rail:<\/em> capacity constraints;<\/li>\n<li><em>sea:<\/em> container port competitiveness; and<\/li>\n<li><em>air:<\/em> cargo capacity, competitiveness and airport landing fees.<\/li>\n<\/ul>\n<p>Roy points out that the countries that lead the global logistics performance rankings have all invested heavily in major hubs to connect various transportation modes efficiently. As the new federal government looks to increase infrastructure spending, he urges them to take advantage of the opportunity to enhance Canada\u2019s trade-related infrastructure to support our trade, and thus our longer-term prosperity.<\/p>\n<p><strong>Canada\u2019s shifting trade patterns by transportation mode<br \/>\n<\/strong>The chapter finds that, over the past decade, Canada\u2019s goods trade has become far more reliant on marine transportation and less reliant on roads \u2014 although roads remain the most common mode by a wide margin:<\/p>\n<p><a href=\"https:\/\/policyoptions.irpp.org\/wp-content\/uploads\/2025\/08\/Roy_blog_fig_1.png\" rel=\"attachment wp-att-25561\"><img fetchpriority=\"high\" decoding=\"async\" class=\"aligncenter size-full wp-image-25561\" src=\"https:\/\/policyoptions.irpp.org\/wp-content\/uploads\/2025\/08\/Roy_blog_fig_1.png\" alt=\"Roy_blog_fig_1\" width=\"911\" height=\"661\" \/><\/a><\/p>\n<p>The author suggests two key drivers of these trends.<\/p>\n<p><em>Driver 1: Canadian trade has stagnated with US, but grew with rest of world over the past decade.<\/em><\/p>\n<p><a href=\"https:\/\/policyoptions.irpp.org\/wp-content\/uploads\/2025\/08\/Roy_blog_fig_2.png\" rel=\"attachment wp-att-25563\"><img decoding=\"async\" class=\"aligncenter size-full wp-image-25563\" src=\"https:\/\/policyoptions.irpp.org\/wp-content\/uploads\/2025\/08\/Roy_blog_fig_2.png\" alt=\"Roy_blog_fig_2\" width=\"911\" height=\"661\" \/><\/a>As a result of this differential performance, the share of Canada\u2019s overall merchandise trade conducted with the US shrank from 76% in 2002 to 63% in 2012. These regional shifts matter for transportation because Canadian trade with the US relies heavily on roads (and, to a lesser extent, rail and pipelines), whereas Canadian trade with the rest of the world relies much more \u2014 and increasingly \u2014 on marine and air modes (figure below). Air is the dominant mode used for trade with Western Europe, while sea is primarily used for trade with Asia.<\/p>\n<p><a href=\"https:\/\/policyoptions.irpp.org\/wp-content\/uploads\/2025\/08\/Roy_blog_fig_3.png\" rel=\"attachment wp-att-25565\"><img decoding=\"async\" class=\"aligncenter size-full wp-image-25565\" src=\"https:\/\/policyoptions.irpp.org\/wp-content\/uploads\/2025\/08\/Roy_blog_fig_3.png\" alt=\"Roy_blog_fig_3\" width=\"911\" height=\"661\" \/><\/a><em>Driver 2: Increased use containerized freight in recent decades.<strong><br \/>\n<\/strong><\/em>The value of Canada\u2019s trade moved by sea nearly doubled between 2002 and 2012. This is largely due to increased containerized freight, which has been a major development in marine (and other) transportation modes in recent decades. Containerization allows for standardized sizes and easier intermodal transportation changes, including the ability to transfer containers seamlessly from ships to rail or trucks. This opens up more possible routes between the origin and final destination.<\/p>\n<p>Canada\u2019s biggest increases in marine traffic were on the country&#8217;s West Coast at the ports of Vancouver and Prince Rupert (the latter only started handling containers in 2007), which likely relates to increased trade with Asia, particularly China.<\/p>\n<p>The chapter describes some considerations and trade-offs that firms face when shipping goods in and out of Canada. Roy provides an overview of each transportation mode and some of the emerging issues \u2014 this table gives a quick summary:<\/p>\n<p><a href=\"https:\/\/policyoptions.irpp.org\/wp-content\/uploads\/2025\/08\/Roy_blog_table_1.png\" rel=\"attachment wp-att-25567\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-25567\" src=\"https:\/\/policyoptions.irpp.org\/wp-content\/uploads\/2025\/08\/Roy_blog_table_1.png\" alt=\"Roy_blog_table_1\" width=\"1422\" height=\"715\" \/><\/a><strong>Policy recommendations<\/strong><br \/>\nThis chapter includes the following five policy recommendations:<\/p>\n<p><em>1. Further Canada\u2019s Gateway and Trade Corridor initiatives<\/em><br \/>\nAs other countries invest heavily in their trade-related infrastructure, the Canadian government is on the right track with its Gateway and Trade Corridor programs, but these initiatives should be taken further. The Ontario-Quebec Continental Gateway initiative, in particular, has not yet fully delivered on its promises. A coherent plan to develop logistics clusters should be an integral part of the gateway program.<\/p>\n<p><em>2. Plan continentally<\/em><br \/>\nThere is a strong case for adopting a continental, North American approach \u2014 rather than simply focusing on Canada\u2019s international border on its own \u2014 when planning transportation systems and infrastructure, as well as a potential security perimeter. Such an approach could, for instance, include simpler and smoother customs clearances with the US and Mexico.<\/p>\n<p><em>3. Relieve domestic road congestion<\/em><br \/>\nThrough its infrastructure programs, the federal government should assist provincial and municipal governments to repair roads and improve the fluidity of road travel. Interestingly, congestion at international border crossings no longer seems to be a major issue, but road congestion in large urban areas has become a major concern for shippers across the country. Goods in Canada can travel long distances by truck before reaching exit points at ports and border crossings. Road congestion adds to the cost of imports and exports and negatively affects the competitiveness of all industries moving products across major urban areas.<\/p>\n<p>One potential policy response is to adopt congestion prices in some major cities (as advocated by Canada&#8217;s <a href=\"https:\/\/ecofiscal.ca\/wp-content\/uploads\/2015\/10\/Ecofiscal-Commission-Pricing-Traffic-Congestion-Report-November-2015.pdf\" target=\"_blank\" rel=\"noopener noreferrer\">Ecofiscal Commission<\/a>). However, Roy cautions that such a move is only one piece of a larger strategy that should be complemented by major investments in public transit. An additional part of the overall strategy that might require less up-front money would be to better harmonize road transportation regulations between provinces.<\/p>\n<p><em>4. Encourage the use of information technology<\/em><br \/>\nCanada lags behind other countries \u2014 especially the US \u2014 in adopting new information technologies for logistics and supply chain applications. Policymakers, therefore, should examine the use of intelligent transportation systems (ITS) and new technologies to facilitate transportation, which could help alleviate the road congestion issue and lower the cost of complying with various customs regulations.<\/p>\n<p><em>5. Improve data collection<\/em><br \/>\nCanada needs to collect more and better data on its trade flows. In particular, Transport Canada should collect more data on the performance of ports, airports (including working with Statistics Canada to collect adequate air cargo data), bridges and other entry points. Canada\u2019s transportation, trade and supply chain performance \u2014 and by implication its broader economic performance \u2014 cannot be improved if it isn\u2019t measured accurately.<\/p>\n<p><strong>Conclusions<br \/>\n<\/strong>The competitiveness of Canada\u2019s global supply chains and the reliability and efficiency of its transportation infrastructure go hand in hand. Over the past decade, a greater share of Canada\u2019s merchandise trade has been transported by sea and air, and relatively less by roads and rail. This is due, in part, to changing regional patterns of Canada\u2019s trade away from the US to other countries, as well as increased use of containers to ship goods.<\/p>\n<p>Nonetheless, although roads have lost significant trade share over this period, they remain the most commonly used transportation mode for Canadian trade by a wide margin. Here, international border crossings no long seem to be a major concern for Canadian businesses. Instead, the bigger outstanding issues are Canada\u2019s weak trade performance with the US, and domestic road congestion in major cities (such as Toronto, Montreal and Vancouver), which causes delays and additional costs for Canadian traders.<\/p>\n<p>For its part, Canada\u2019s rail system has faced capacity constraints and service issues, as well as safety concerns and regulatory reviews after the tragic accident in Lac-M\u00e9gantic in 2013.<\/p>\n<p>Canadian ports and airports have become bigger conduits of international trade over the past decade, and recently concluded trade deals (CETA with the European Union and the TPP with 11 other Pacific Rim countries), if implemented, could reinforce these trends.<\/p>\n<p>Canadian ports are generally well-equipped to handle bulk products, but the competitiveness of container ports is more fragile. Recent challenges include labour disputes, in both Canada and the US, reduced rail capacity in the winter to transport containers further inland to their final destinations, and the longer-term concern over climate change, which could reduce river depth and handling capacity along the Saint Lawrence Seaway.<\/p>\n<p>A perennial challenge for Canada\u2019s air cargo is its limited market size. This limits freighter capacity and makes it hard to compete on costs relative to US alternatives, which increasingly have been used to transport Canada\u2019s aerospace exports (a phenomenon called \u201cinternational leakage\u201d). Canada\u2019s competitive disadvantage is exacerbated by relatively high taxes and landing fees.<\/p>\n<p>Compared with other countries, Canada generally has a competitive transportation infrastructure and overall good logistics performance, but more could be done to improve several key areas outlined above.<\/p>\n<p>As the new federal government looks to increase infrastructure spending, it should adopt a long-term view and take advantage of the opportunity to enhance Canada\u2019s trade-related infrastructure to support the country\u2019s international trade and longer-term prosperity.<\/p>\n<p>I encourage you to read the full chapter <a href=\"https:\/\/irpp.org\/wp-content\/uploads\/2016\/02\/AOTS6-Roy.pdf\" target=\"_blank\" rel=\"noopener noreferrer\">here<\/a>, which is part of the IRPP\u2019s forthcoming Canadian trade policy <a href=\"https:\/\/irpp.org\/research\/trade\/\" target=\"_blank\" rel=\"noopener noreferrer\">volume<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The efficiency and reliability of a country\u2019s transportation networks are key drivers of international competitiveness, and can help expand global trade and attract foreign investment. This is particularly true with the emergence of a \u201csupply chain mindset\u201d as production processes become more international. In this latest chapter, Jacques Roy (HEC Montr\u00e9al, Professor of Logistics and [&hellip;]<\/p>\n","protected":false},"author":889,"featured_media":293159,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","ep_exclude_from_search":false,"footnotes":""},"categories":[],"tags":[8407,8384],"article-status":[],"irpp-category":[],"section":[],"irpp-tag":[],"class_list":["post-293161","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","tag-trade-fr","tag-transport-fr"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.8 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>The role of transportation networks&nbsp;in&nbsp;moving Canadian trade<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/policyoptions.irpp.org\/fr\/2016\/02\/the-role-of-transportation-networks-in-moving-canadian-trade\/\" \/>\n<meta property=\"og:locale\" content=\"fr_FR\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The role of transportation networks&nbsp;in&nbsp;moving Canadian trade\" \/>\n<meta property=\"og:description\" content=\"The efficiency and reliability of a country\u2019s transportation networks are key drivers of international competitiveness, and can help expand global trade and attract foreign investment. This is particularly true with the emergence of a \u201csupply chain mindset\u201d as production processes become more international. In this latest chapter, Jacques Roy (HEC Montr\u00e9al, Professor of Logistics and [&hellip;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/policyoptions.irpp.org\/fr\/2016\/02\/the-role-of-transportation-networks-in-moving-canadian-trade\/\" \/>\n<meta property=\"og:site_name\" content=\"Policy Options\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/IRPP.org\" \/>\n<meta property=\"article:published_time\" content=\"2016-02-29T20:20:52+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-08-28T19:25:47+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/policyoptions.irpp.org\/wp-content\/uploads\/2025\/08\/WordPress-Image-truck-1.png\" \/>\n\t<meta property=\"og:image:width\" content=\"1822\" \/>\n\t<meta property=\"og:image:height\" content=\"638\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"author\" content=\"brian\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" 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