With CP Rail trains ground to a halt nationwide and thousands of workers starting to march picket lines, the anticipated strike at Canada’s second-largest railroad operator has come at one of the worst times for the country’s economy, experts say.
“The hit to the Canadian economy that this can cause is so detrimental,” Richard Powers, associate professor at the University of Toronto’s Rotman School of Management, told Global News. “I don’t know what else we can face without seeing a real collapse.”
The strike, involving nearly 3,000 engineers, conductors and other train employees, took effect early Sunday morning after a lockout initiated by the Calgary-based railway.
Following the lockout, the Teamsters Canada Rail Conference said workers were also on strike, with picketing underway at various Canadian Pacific locations. This is the fifth work stoppage since 1993, according to CP Rail.
There are 26 outstanding issues, including wages, benefits and pensions, currently causing turmoil between the two sides. While both parties are still at the table with federal mediators, significant negotiation is still foreseen. Powers doesn’t see the conflict ending before Friday.
“It appears that there are still a lot of issues yet to discuss and to agree upon. A strike coming at this time, it just adds to the confusion and chaos,” Powers said, noting the clash has come off the heels of the COVID-19 pandemic and Russia’s invasion of Ukraine, which have already drastically impacted the economy not only in Canada but across the world.
For Canadians, everything from agricultural and farm products to fuel and vehicles will be impacted, according to Powers.
“Movement of parts is so important and now you’ve just cut that off,” he said.
1:32 Reactions pour in from the Prairies as possible CP Rail lockout draws closer
Reactions pour in from the Prairies as possible CP Rail lockout draws closer
According to Dennis Darby, president of the trade association Canadian Manufacturers and Exporters, a survey conducted between Feb. 8 and Feb. 28 found nine out of ten of Canadian manufacturers are facing supply chain issues.
He said Canadian manufacturers have already lost out on an estimated $10.5 billion in sales because of transportation network disruptions and they simply cannot afford another interruption.
“Adding to our concern is the fact that a labour disruption at CP Rail will deal another blow to Canada’s reputation as a good place to do business and as a reliable supply chain partner,” Darby said.
The grain industry, specifically, is anticipated to feel the impact of the strike.
“We have those waiting for the crop off the west coast, feed-lot operators waiting for product, processing facilities across the prairies and in eastern Canada in need of canola and cereal grains in order to provide bread for the store shelves. And, we’re seeing inflation increases,” Western Grain Elevator Association spokesperson Wade Sobkowich said last week.
“Everything is coming at us all at once. There are some things we can control and some things we can’t. We should be able to control a work stoppage and yet here we are facing one. This is the last thing we need right now in the grain sector and as an economy here in Canada.”
Sobkowich said roughly half of annual grain crops are exported on CP rail lines. He said average crop size ranges between 30 and 40 million metric tons.
The beef industry could also be affected as CP Rail imports corn for feeding cattle in the nation, Opher Baron, professor and academic director at the University of Toronto’s Rotman School of Business, told Global News.
“They are basically feeding the beef industry in Canada,” he said, noting much of the country’s ground transportation is done on the rails.
Canadians could pay more when buying food, clothes, and more depending how long the strike lasts, according to Baron.
“This strike is not a small pool. It’s potentially a big one. It can have quite a large effect,” he said.
Even in the United States, the CP rail conflict has interrupted fertilizer and other shipments to and from the country.
Canadian Pacific covers much of the U.S. Midwest and is a large shipper of potash and fertilizer for agriculture. It also carries grain from the U.S. to its northern neighbour for domestic use and exports. The railroad serves the Dakotas, Minnesota, Iowa, Illinois, Wisconsin, Missouri and other states, according to a map on its investor website.
CP got 29 per cent of its 2020 freight revenue from cross-border shipments between the U.S. and Canada, its investor website states.
Locked-out workers picket the Canadian Pacific Railway headquarters in Calgary, Alta., Sunday, March 20, 2022.
THE CANADIAN PRESS/Jeff McIntosh
According to Powers, the federal government needs to be “looking at back to work legislation” to kick start the Canadian economy. However, he added that this type of measure is rarely used in Canada as it is an affront to the collective bargaining process.
“We have to respect the process. Let’s give them a chance. But at the same time, they have to recognize that at some point things have to change,” he said.
— With files from Global News’ Sean Boynton, Connor O’Donovan and The Canadian Press
OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.
However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.
The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.
Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.
The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.
The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.
This report by The Canadian Press was first published Oct. 17, 2024.
OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.
In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.
The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.
Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.
In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.
It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.
This report by The Canadian Press was first published Oct 16, 2024.
OTTAWA – Statistics Canada says manufacturing sales in August fell to their lowest level since January 2022 as sales in the primary metal and petroleum and coal product subsectors fell.
The agency says manufacturing sales fell 1.3 per cent to $69.4 billion in August, after rising 1.1 per cent in July.
The drop came as sales in the primary metal subsector dropped 6.4 per cent to $5.3 billion in August, on lower prices and lower volumes.
Sales in the petroleum and coal product subsector fell 3.7 per cent to $7.8 billion in August on lower prices.
Meanwhile, sales of aerospace products and parts rose 7.3 per cent to $2.7 billion in August and wood product sales increased 3.8 per cent to $3.1 billion.
Overall manufacturing sales in constant dollars fell 0.8 per cent in August.
This report by The Canadian Press was first published Oct. 16, 2024.
