Freight trains across Canada have come to a grinding halt and some commuter traffic is also suspended as thousands of workers at the country’s two main railway companies have been locked out despite efforts from the federal government to urge a deal to end their labour dispute.
Canadian National Railway (CN) and Canadian Pacific Kansas City (CPKC) said early Thursday that they had moved forward with their lockout notices and shut down services after negotiations with the Teamsters Canada Railway Conference (TCRC) union failed to reach an agreement.
CPKC said in a statement it “has bargained in good faith, but despite our best efforts, it is clear that a negotiated outcome with the TCRC is not within reach.”
“The TCRC leadership continues to make unrealistic demands that would fundamentally impair the railway’s ability to serve our customers with a reliable and cost-competitive transportation service,” CPKC said.
CN said in a separate statement that the union did not respond to another offer in a final attempt to avoid a labour disruption.
“Without an agreement or binding arbitration, CN had no choice but to finalize a safe and orderly shutdown and proceed with a lockout,” the rail operator said.
TCRC had issued a news release on Sunday saying that unless the parties reach a last-minute agreement, workers will be off the job as of 12:01 a.m. eastern time Thursday.
Not long after the union’s statement, CN Rail issued a notice that it intends to lock workers out at that same time unless an agreement or binding arbitration is achieved.
TCRC, which represents roughly 10,000 employees at CN and CPKC, said despite months of negotiations, all parties “remain far apart” and “the main obstacles to reaching an agreement remain the companies’ demands, not union proposals.”
Picketers at Ogden Yards in Calgary Wednesday night shortly after the work stoppage began.
Global News
Shutdown puts supply chain ‘at risk’
This is the first time that a work stoppage has occurred simultaneously at CN and CPKC, which are responsible for the bulk of Canada’s freight train operations.
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The railway shutdown, which had business groups, the agriculture sector, exporters and retailers concerned, has stakeholder groups worried about the potential for massive losses and supply chain disruptions in different industries that rely on the rail networks.
Grain Growers of Canada estimates that the initial impact of the dual stoppage will cost farmers more than $43 million a day in the first week alone. If the stoppage continues, those losses are expected to increase to $50 million a day the week after and beyond, according to GCC, which represents more than 65,000 grain farmers across Canada.
“The total shutdown of Canada’s two national railways is an unprecedented crisis for the grain industry,” said Kyle Larkin, GCC’s executive Director, in a statement on Thursday.
“With work stoppages at both CN and CPKC, our entire supply chain is at risk. This disruption is happening at the worst possible moment, during the start of harvest season, when our farmers are most dependent on our rail network.”
The Canadian Chamber of Commerce and Canadian Federation of Independent Business called on the federal government to step in.
“Canadians are already contending with a high cost of living. They need to see decisive leadership from government that puts their families and livelihoods first,” said Perrin Beatty, president and CEO of Canadian Chamber of Commerce
“The Minister of Labour must use the tools at his disposal to immediately resolve this conflict through binding arbitration.”
CFIB said warned that the impacts of the railway shutdown will be felt by consumers.
“Not only will the work stoppage negatively affect shipments of raw materials and goods essential for small business operations, but it will also lead to a decreased on-shelf availability of consumer products, including grocery and drugstore essentials and even baby formula,” said Dan Kelly, CFIB’s president and CEO.
‘Far-reaching’ economic consequences
Ahead of the shutdown, Labour Minister Steve MacKinnon held talks in Montreal and Calgary with the railway companies and the union to try to get them to reach a deal.
The minority Liberal government would need the support of another party if it were to legislate an end to the shutdown, and its current supply-and-confidence agreement partner, the NDP, has been opposed to measures like binding arbitration.
Speaking to Global News on Wednesday, Labour Minister Steve MacKinnon said “significant issues” remained in negotiations between the two rail companies and unions.
“The economic consequences would be far-reaching, and the impact on everyday Canadians would be significant,” he said.
The hit to Canada’s economy could snowball if the rail stoppage stretches on, according to an analysis from Bank of Montreal.
Senior economist Robert Kavcic said in a note to clients Thursday morning that another “supply shock” for the economy could, in the near-term, hurt growth and stoke inflation — just as price pressures are finally coming back under control.
The impasse also affects tens of thousands of commuters in Toronto, Montreal and Vancouver, whose lines run on CPKC-owned tracks. Passenger trains cannot run on those rails without the locked-out traffic controllers to dispatch them.
The rail companies and union have traded accusations of refusing to engage on certain sticking points, and mediators have been brought in to try and break the impasse over scheduling issues, relocation and safety concerns from workers.
“Throughout this process, CN and CPKC have shown themselves willing to compromise rail safety and tear families apart to earn an extra buck,” said TCRC president Paul Boucher in a statement.
“The railroads don’t care about farmers, small businesses, supply chains, or their own employees. Their sole focus is boosting their bottom line, even if it means jeopardizing the entire economy.”
— with files from Global News’ Craig Lord, Sean Boynton and Mackenzie Gray and The Canadian Press.
