Canadian Pacific Kansas City workers stop traffic into a CPKC rail yard in Vaughan, Ontario.Sammy Kogan/The Globe and Mail
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Update: Later on Thursday, the federal government ordered an end to the railway stoppage and sent the labour disputes for final arbitration. Read more here.
Prime Minister Justin Trudeau said the federal government will soon take steps to resolve the railway stoppages that have halted Canada’s supply lines and threatened to bring economic harm.
Mr. Trudeau made the comments on Thursday morning, hours after Canadian Pacific Kansas City CP-T railway and Canadian National Railway CNR-T locked out workers and shut down their rail networks after labour negotiations failed to yield new agreements.
Almost 10,000 rail employees represented by the Teamsters Canada Rail Conference are now off the job, halting all movements of grain, potash, consumer goods and other freight. Business groups are urging the government to impose mediation on the parties and restore rail service to limit damage to the economy.
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Mr. Trudeau told reporters during a stop in Sherbrooke, Que., he takes the railway lockouts seriously and is working to find a resolution quickly, without elaborating. He said the rail stoppage will have an impact across the country.
Prime Minister Justin Trudeau delivers a statement on the potential rail strike following an event in Gatineau, Que., on Aug. 21, 2024.Sean Kilpatrick/The Canadian Press
“That’s why we are on this. We’re taking it so seriously. The [labour] minister is engaged directly,” he said. “We are not taking this lightly, obviously, because Canadians across the country are worried about it, and we will have more to say shortly on what we’re doing to make sure that the right solution is found quickly for the economy.”
Contract talks assisted by federal mediators resumed on Thursday in Montreal and Calgary.
CPKC, CN and the union have been in separate negotiations for several months. The Teamsters had issued a strike notice at CPKC but not at CN.
In Calgary, CPKC chief executive officer Keith Creel presented the union negotiators with a final offer shortly before the midnight deadline, with improved wages and scheduling provisions. “That offer was presented and it was rejected before the deadline,” said Patrick Waldron, a CPKC spokesman.
Both railways say they are offering better pay and schedules for the workers, who include engineers, conductors, dispatchers and yard workers in three separate bargaining units.
The union says its members need better safety and scheduling provisions, and the employers are demanding they work longer days and spend more time away from home. A typical CN train operator made $121,000 to $150,000 in 2023, about $10,000 more than their CPKC counterpart.
The railways have called on the government to impose binding arbitration in the disputes, echoing calls of the business community.
The Conference Board of Canada says a two-week stoppage at both railways would cause a $3-billion loss in Canada’s nominal gross domestic product for this year. Households would see a $1.3-billion decline in wages while business profits would fall by $1.25-billion.
Business groups warn the shutdown of the rail shippers, which carry $380-billion in goods every year, will cause lost jobs, closed factories and shortages of consumer goods and raw materials.
John Corey, president of the Freight Management Association of Canada, said the lockouts underline the need for the government to stop “sitting on its hands” and take action to end the disputes.
“Essentially, the Canadian supply chain has ground to a halt,” he said. “There are going to be no goods coming into the country through the ports and nothing’s going to go out.”
While the impact on shippers of commodities and other goods was evident days ago, the impact on consumers might not be seen right away. Mr. Corey predicted the flow of fruits and vegetables from California will be halted, and shoppers will eventually see fewer varieties of soft drinks and other items as manufacturers and suppliers focus on only the best-selling products.
At Vancouver, the country’s largest port, officials expect disruptions to the movement of containers, grain, potash, coal and other cargo shipped by rail to and from the West Coast. Before rail workers were off the job, the Port of Vancouver took measures to co-ordinate traffic and minimize congestion, including asking ships en route to adjust arrival times, Alex Munro, spokesman for the Vancouver Fraser Port Authority, said in a statement.
Last year, the port struggled with work stoppage that caused a months-long backlog of cargo. A 13-day strike by 7,400 British Columbia waterfront employees halted operations at 35 terminals across the province. In Vancouver, the strike affected the movement of $800-million a day as 17 ships were diverted to other ports and more were stuck at anchor, the authority said.
To the north on the B.C. coast, the Port of Prince Rupert, which is undergoing a multibillion-dollar expansion, said the railway work stoppage threatens the daily movement of goods worth $150-million. “This affects the supply chains of goods that Canadians rely on every day while also impacting the thousands of workers across Western Canada employed in our export industries,” said James Cain, spokesman for the Prince Rupert Port Authority.
Parliament is currently on summer break, so if the minority government were to introduce back to work legislation, they would need to recall the House of Commons and find support for such a bill from one of the opposition parties.
The Liberals have an agreement with the NDP for support but the New Democrats will not vote in favour of back-to-work legislation and do not support binding arbitration. This week the NDP released a statement calling on Mr. Trudeau to pre-emptively declare that he won’t intervene on the side of the rail companies.
The Bloc Québécois, meantime, released a statement this week accusing the companies of manufacturing the economic crisis and of bad faith negotiations. Party spokesperson Julien Coulombe-Bonnafous on Wednesday declined to say what the Bloc would do if presented with back-to-work legislation but noted that the party has never supported such a bill in the past.
While in government the Conservatives used back-to-work legislation to end a strike at CP Rail in 2012, however, the party declined to say Wednesday whether it would support such a move in this case.
Before the lockouts, Labour Minister Steven MacKinnon declined a CN request to refer the dispute to the Canadian Industrial Relations Board for arbitration, saying collective agreements should be decided by the parties at the table.
Mr. MacKinnon’s spokesman, Hartley Witten, said the minister was in meetings on Thursday on the matter. “He is going to assess the tools he has at his disposal,” Mr. Witten said, adding everything is on the table.
The work stoppage is also having impacts south of the border and in a sign of how closely the United States is watching the work stoppage Labour Minister Steven MacKinnon on Thursday spoke with his American counterpart Acting Labour Secretary Julie Su.
Earlier this week the U.S. Chamber of Commerce called for Ottawa to “immediately intervene” to avert a disruption, saying the stoppage would jeopardize workers and industries south of the border as well.
However, in a statement Thursday U.S. Ambassador to Canada David Cohen emphasized the need for a negotiated settlement.
“Our Embassy in Ottawa and our colleagues in Washington are closely tracking the developments around this issue and have expressed concern about the effects of a rail work stoppage on U.S.-Canada trade,” Mr. Cohen said.
“We believe in and support the right to collective bargaining. While the Embassy does not take sides or intervene in Canadian labour disputes, we hope for a speedy resolution and encourage all the parties to remain at the bargaining table and to reach a settlement as quickly as possible.”