Shutdown of CN Rail lines leads to propane shortages in the Maritimes

HALIFAX -- Businesses and homes across Atlantic Canada are days away from running out of propane as a result of anti-pipeline protests that have cut off rail links across Canada.

Ian Wilson, president of Halifax-based Wilson Fuel, said his company is rationing propane by partially filling customers' tanks.

"If we just filled everybody's tank on delivery, we'd be looking at outages today," he said in an interview Friday.

"This isn't just an inconvenience. This is a serious problem. And when you're talking about what people use for heating in a Canadian winter, that's a public health and safety issue."

Greg McCamus, president of Ontario-based Superior Propane, said Atlantic Canada and Quebec remain highly dependent on rail service to maintain propane supplies.

"We don't want to create panic with people ... but this will evolve pretty quickly when logistics and supply get out of sync," he said in an interview. "It will take a while for it to reconstitute itself."

McCamus, whose company operates Canada's largest propane distribution network, said suppliers are trying to supplement their dwindling supplies by using trucks, but the fleet of specialized vehicles used for the task are already at capacity.

"Nobody keeps a whole bunch of propane-hauling trailers available just in case something like this happens," he said.

"It's a very serious situation. We're calling on government to take joint action to help resolve the situation."

Propane trucks are being dispatched to Sarnia, Ont., the location of the largest propane terminal in Eastern Canada. But there's already a backlog, forcing truck drivers to wait up to eight hours to get a load. Trucks are also being sent to two refineries in Montreal, where the backlog isn't as long.

While it's true there are refineries that produce propane in Saint John, N.B., and Come By Chance, N.L., those facilities can't meet the demand from the region.

As of Thursday, Canadian National Railway started a progressive shutdown in Eastern Canada, while Via Rail cancelled all service on CN tracks in Canada.

The rail blockades began last week after the RCMP in British Columbia enforced an injunction against Wet'suwet'en First Nation hereditary chiefs and their supporters blocking construction of the Coastal GasLink natural gas pipeline near Houston, B.C.

Wilson also said government officials should take action to clear the blockades.

"There's a difference between a peaceful protest and doing things that are causing people real harm," he said. "This is not an economic issue. This is a health-and-safety problem .... The rule of law has to be restored."

Nathalie St-Pierre, president and CEO of the Canadian Propane Association, said the week-long strike in November involving 3,200 CN workers led to shortages, but the propane supply in Atlantic Canada was partially replenished by a trickle of rail cars.

"Right now there's nothing," St-Pierre said in an interview. "The supply is depleting quickly."

The problem is that it is too expensive to build large storage tanks for pressurized propane, which is why a steady supply by rail is needed for Atlantic Canada.

St-Pierre said suppliers in the region are looking after priority customers, which include seniors homes and certain institutional clients, such as water treatment plants.

"The railway is the backbone of this infrastructure," St-Pierre said. "And it's not just propane. It's every commodity that travels by rail."

Meanwhile, the suspension of railway traffic is also having an impact on the Port of Halifax, where 60 per cent of the cargo arrives and leaves by rail.

"The longer this carries on, the more challenging it's going to be for the terminal operators to maintain yard space," said port spokesman Lane Farguson. "We are a rail-based port."

The port's inland markets linked by rail include Toronto, Montreal and manufacturing centres in the U.S. Midwest, including Chicago and Detroit.

Those markets also support the port's export business, which mainly ships to Asia, Europe and the Caribbean.

If the railway closure drags on, the port will get clogged with incoming shipping containers, and the cargo ships will be forced to find another port to deposit their goods, Farguson said.

"The longer this drags on, the more it erodes our reputation," he said.

This report by The Canadian Press was first published Feb. 14, 2020.