By Leo Ryan, Editor

Following the collapse of increasingly bitter negotiations with the Teamsters Union (TCRC), Canadian National Railway (CN) and Canadian Pacific Kansas City Ltd. (CPKC) early today locked out 9,300 engineers, conductors and yard workers. The dramatic action came after the parties failed to agree on a new contract before the midnight deadline.

The Canadian Class 1 railways transport some $1 billion in commodities and consumer goods each day. Several days ago, they began to pre-emptively halt certain shipments to avoid stranding cargo at congested facilities. The two railways have indicated they will maintain services on their U.S. networks.

The unprecedented simultaneous work stoppage by the two major railways will have “a devastating impact  for the supply chain” and  for Canadian ports including Montreal, Vancouver and Halifax,  said John Corey, President of the Freight Association of Canada whose members purchase more than $4 billion in freight services by marine, truck, rail and air freight.

“With CN and CPKC forming a coast to coast link with Canadian ports, the halt of rail traffic could provoke a virtual shutdown of port activity in a day or two,” Mr. Corey told Maritime Magazine. “There may still be some truck activity at the ports but nothing significant. No bulk commodities can be explored and no containers call be imported due to the lack of rail service.”

The labour conflict, he said, “will also harm every Canadian consumer and tarnish Canada’s reputation as a reliable trading partner.”

“Ships are already being diverted to U.S.  ports,” Mr. Corey added. “If we have a prolonged strike, the question is will they come back or find an alternative elsewhere.”

Calls for government intervention

Together with many agricultural, manufacturing, and mining business groups, both of the railways have urged the federal government to intervene with binding arbitration.

Shortly before noon today (Thursday), Prime Minister Trudeau hinted the minority Liberal government “will have more to say shortly” on finding “the right solution.”

Whether this will involve back-to-work legislation and binding arbitration remains to be seen. Such a move would require support from the opposition Conservative Party since the New Democratic Party today confirmed it would not support any interference in the bargaining process.

One should recall, too, that Labor Minister Steven MacKinnon turned down CN’s request to impose binding arbitration last week and encouraged parties to reach a deal at the bargaining table.

In a statement, CPKC said: “Throughout nearly a year of negotiations, CPKC has remained committed to doing its part to avoid this work stoppage. CPKC 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.

“At this time, the responsible path forward for the union, the company, our customers, the Canadian economy and North American supply chains and the public interest is for TCRC and CPKC to engage in binding arbitration to resolve all outstanding disputes. Binding arbitration is an effective, reasonable and fair process that ultimately has been used many times in the past to resolve disputes with this union. CPKC reiterates its standing offer to resolve this matter through binding arbitration.”

Teamsters Union President Paul Boucher affirmed the main obstacles to reaching an agreement were the companies’ demands. “Their sole focus is boosting their bottom line, even if it means jeopardizing the entire economy.”

The Canadian Federation of Independent Business (CFIB) noted: “Small businesses will be left with very few alternatives, especially as trucking capacity is already strained and shipments are now stuck in the system. And as many businesses are already very weak due to increased post-pandemic debt, weak demand and dramatically higher operating costs, this couldn’t come at a worse time. We’re calling on the federal government to intervene immediately by introducing binding arbitration or enacting back-to-work legislation. Longer term, Canada needs a better way of addressing labour disputes for critical supply chain industry players.”

“As the single largest industrial customer group of Canada’s railways, the mining sector has seen first-hand how detrimental unpredictable work stoppages are to Canada’s reputation as a reliable trading partner,” said Pierre Gratton President and CEO of the Mining Association of Canada. “The urgent need for Canadian minerals and metals presents a generational opportunity, and we are in a race with our competitors to meet global demand.”

(Images of Teamsters Union members attending a rally before CN headquarters in Montreal and CPKC freight train)

LATE NEWS: Labour Minister Steve MacKinnon announced late Thursday afternoon that he is invoking powers under Section 107 of the Canada Labour Code which allows the government to refer a labour dispute to the Canada Industrial Relations Board for binding arbitration. He ordered both railways to resume operations as quickly as possible. “I have also directed the board to extend the term of the current collective agreements until new agreements have been signed, and for operations on both railways to resume forthwith,” he said.