A train arrives at the CN Rail freight depot in Hamilton, Ont. on Aug. 19.Carlos Osorio/Reuters
The shutdown of Canada’s railway network is widening ahead of possible lockouts or strikes on Thursday at both domestic freight haulers.
As contract talks with the Teamsters union continue, Canadian Pacific Kansas City Ltd. CP-T and Canadian National Railway Co. CNR-T are winding down their domestic operations to ensure a stoppage at either railway will be orderly, with trains, crews and goods in safe positions.
Business groups say Canada’s railways move more than $380-billion worth of goods a year and warn a rail stoppage would have a damaging impact on the economy. They say a stoppage threatens the movement and supply of everything from fuel and food to raw materials and consumer goods.
Calgary-based CPKC on Tuesday will stop picking up all shipments within or bound for Canada, deepening the service disruption that began on Aug. 12 with dangerous goods. Montreal-based CN is also shutting down its Canadian system to make sure shipments are not stranded and trains are in the right place, said Jonathan Abecassis, a spokesman for CN.
“The parties still remain far apart,” Mr. Abecassis said. “We have no choice but to move forward with our progressive shutdown.”
Danish marine shipping giant A.P. Moller-Maersk said on Monday it has stopped accepting some Canada-bound shipments, less than a week after a similar move by Norfolk Southern Railway in the United States.
CPKC, CN and the respective Teamsters bargaining teams representing a total of almost 10,000 train crews and other workers are in talks this week ahead of the Thursday lockout deadlines set by both companies. The Teamsters said on Sunday its 3,500 CPKC engineers, conductors, yard workers and traffic controllers will strike on Thursday if no deal is reached.
“We’re serving strike notice to defend the rights and safety of our members,” said Paul Boucher, president of the Teamsters rail division.
Why Canada is on the verge of an unprecedented rail labour stoppage
The union has not issued a strike notice at CN but the company has given notice that it intends to lock workers out unless an agreement or binding arbitration is reached.
Both railways have called for the disagreements to be settled with binding arbitration, a step Labour Minister Steven MacKinnon last week declined to trigger.
“These collective bargaining negotiations belong to CN Rail, CPKC and [Teamsters] workers alone – but their effects will be borne by all Canadians,” Mr. MacKinnon said in a statement on Monday.
Mr. MacKinnon will travel to Montreal on Tuesday and Calgary on Wednesday to meet with the railways, union and federal mediators. His office said he will urge the parties to reach agreements at the bargaining table and prevent work stoppages.
The gradual shutdown of the freight rail network is affecting all sectors of Canada’s manufacturing, importing and exporting sectors.
CPKC’s halt to picking up grain cars, set to begin Tuesday, will be “devastating” for exporters and farmers, said Wade Sobkowich, executive director at the Western Grain Elevator Association. “We’re right at the start of harvest,” Mr. Sobkowich said from Winnipeg. “Peas are coming off, barley is coming off” followed by wheat and canola in the coming weeks. “The world is expecting cereals and pulse crops right about now.”
Any halt to rail service at grain elevators means the grain companies will push back farmers’ deliveries – and payments – at a time of peak prices because the exporters have limited space for crops. “Our system is made to move grain, not store grain,” said Mr. Sobkowich, who represents Richardson International, Parrish and Heimbecker Ltd. and other major exporters that face financial penalties to extend delivery contracts.
The Business Council of Canada has warned in an open letter to Prime Minister Justin Trudeau and other politicians that a rail shutdown will hit thousands of employers and commuters.
“All of Canada’s ports, logistics and warehouse operators, and suppliers will be affected, while a prolonged stoppage will quickly lead to shortages of supplies for numerous industries, forcing businesses to suspend their operations and furlough their employees,” the group said.
Energy services lobby group Enserva said in a letter to federal politicians that a rail disruption would drive up costs and threaten project timelines and contracts. “Production slowdowns, increased storage costs, and distribution bottlenecks would balloon, ultimately impacting affordability and energy security for Canadian households and jeopardizing our international commitments,” said Gurpreet Lail, head of Enserva.
A strike or lockout at CPKC would affect commuters in the Toronto and Montreal areas. CPKC train dispatchers who work on parts of the Metrolinx GO Transit system that serves the Greater Toronto Area, as well as the Réseau de transport métropolitain, which serves Greater Montreal, would be off the job.
GO trains would be halted on the Milton and Hamilton lines, said Andrea Ernesaks, a spokeswoman for Metrolinx. Other parts of Metrolinx’s system served by CN employees who are not in talks are unaffected.
The Teamsters union says talks are hung up on quality-of-life issues: fatigue management, rest periods and scheduling. CPKC has declined to provide details of its proposal but says it has offered “competitive” wages. CN, meanwhile, says it has offered raises of about 30 per cent. In 2023, the average CN conductor made $121,000 while an engineer was paid $150,000. Comparable CPKC workers typically make about $10,000 less.