TORONTO (AP) — Freight trains in Canada are expected to start rolling again soon after the government forced the country’s two major railroads to mediate with their union on Thursday. Potential adverse economic consequences Nationwide and in the United States
Canadian National said it ended the shutdown immediately Thursday evening in an effort to get its trains running quickly. CPKC Railway has not said exactly when its lockout will end. The company said in a statement that it is following the guidance of the Canada Industrial Relations Board, which oversees arbitration. The union is yet to respond to the government’s decision.
The government ordered the railroads to mediate with the Teamsters Canadian Rail Conference to end the lockout. Thursday started at 12:01 p.m After both parties are unable to resolve the contractual conflict. The union represents nearly 10,000 engineers, conductors and dispatchers.
Labor Minister Steven MacKinnon announced the decision to order the jury at a news conference Thursday, minutes after The Associated Press published the story, citing an official familiar with the situation who was not authorized to speak publicly before the report.
McKinnon said he expects trains to be running again within days. Ending the lockdowns is the first step.
Throughout the day Thursday, talks between the two sides ended in a stalemate, with workers striking outside and business groups urging the government to force mediation.
“The Canadian government recognizes the enormous consequences of a rail strike for the Canadian economy, North American supply chains and all Canadians,” said CPKC President and CEO Keith Creel. “The government has acted to protect Canada’s national interest. We regret that the government had to intervene because we fundamentally believe in and respect collective bargaining; However, if all concerned are given a stake, this situation calls for action.”
MacKinnon said the government wanted to give the talks every chance to succeed, but ultimately the economic risk was too great to allow the shutdowns to continue. He declined to instruct a jury a week ago.
“Canada’s economy cannot afford to wait for an agreement that has been delayed for too long and there is fundamental disagreement between the parties,” he said.
Almost all of Canada’s cargo is handled by rail — worth about $1 billion Canadian (US$730 million) a day and adding up to more than 375 million tons of cargo last year — with rail shipments crossing the U.S. border halted on Thursday. About 30,000 passengers in Canada are also affected because their trains use CPKC’s routes. CPKC and CN’s trains continued to run in the US and Mexico during the lockout.
AP reporter Donna Warder A contract dispute involving Canada’s two major freight railroads could have significant economic consequences for Canada and the United States.
Many companies and industries in both countries rely on railroads to deliver their raw materials and finished products, so they were worried about the crisis without regular train service. According to the U.S. Department of Transportation, billions of dollars in goods move between Canada and the United States by rail each month.
Paul Boucher, president of the Teamsters Canadian Rail Conference, said Thursday morning that he believes the railroads are “holding the Canadian economy hostage, pressuring the Liberal government to impose final binding arbitration and try to take away your rights to free collective bargaining.”
For fear of offending unions and the left-leaning NDP, which his government relies on to stay in power, Trudeau decided not to force the parties into binding arbitration before the deadline, but ultimately decided he had no choice.
“Collective bargaining is always the best way forward. When that is no longer a foreseeable option — when we face dire consequences for our supply chains and the workers who depend on them — governments must act,” Trudeau said.
Most businesses can keep enough materials on hand and in room to store finished products to withstand a brief disruption. But ports and other railroads quickly become clogged with cargo shipments that Canadian National and CPKC don’t pick up.
Edward Jones analyst Jeff Windau said many companies have made supply chain changes since the Covid-19 pandemic to help them withstand shorter disruptions. If it drags on the real trouble starts.
Earlier Canadian rail stops lasted only a day or two and usually involved only one of the major railroads, but some extended to eight or nine days. This time the damage has increased as both the railway lines have been stopped.
“They’re very integrated and tied to the economy,” Windau said. “The breadth of things they’re hauling. … Ultimately, I think we need the rails to keep running.”
Chemical businesses and food distributors will be the first to be affected. Railroads have stopped accepting new shipments of hazardous materials and perishables since they were phased out last week, but most chemical plants said they would be OK for another week.
The auto sector could also quickly see problems as it relies on just-in-time shipments, with significant cross-border deliveries of engines, parts and finished vehicles. Flavio Volpe, president of the Auto Parts Manufacturers Association, posted in X that nearly four out of every five cars manufactured in Canada are exported to the United States by rail. He said a prolonged shutdown could cause temporary work stoppages similar to the impact of the five-day 2022 Ambassador Bridge blockade.
More than 30,000 commuters in Vancouver, Toronto and Montreal felt the pain of the lockdowns firsthand. They had to scramble to find a new way to get to work on Thursday morning as their commuter trains could not run while CPKC was closed.
CN has been negotiating with the Teamsters for nine months, while CPKC has been trying to reach an agreement for a year, the union said.
Canadian negotiations have been bogged down by concerns about the way rail workers are scheduled and rules designed to prevent fatigue, as well as issues related to providing train workers with adequate rest. Both railroads have proposed moving away from the existing system to an hourly system that pays workers based on miles traveled, which they say will make it easier to provide predictable hours. The union said it did not want to lose hard-fought fatigue protections.
The railways said the hikes are in line with recent deals in the industry and include their contractual concessions. Engineers already earn about $150,000 a year at Canadian National, while conductors earn $120,000, and CPKC says its pay is comparable.
___
Funk reports from Omaha, Nebraska. Associated Press writer Amir Madani in Buellton, California, contributed to this report.
