As the negotiating clock ticks down, the country’s two main railways are set for a nationwide strike or lockout in less than two weeks after a ruling that their work does not amount to an essential service.
Canadian National Railway Co. and Canadian Pacific Kansas City Ltd. warned Friday that lockouts on Aug. 22 are imminent unless new contracts with their employees can be secured.
The warnings came hours after the Canada Industrial Relations Board ruled that a work stoppage would pose no “serious danger” to public health or safety, opening the gate to a full-fledged strike or lockout. If either occurs, employees at CN or CPKC would not be compelled to continue hauling goods, including key commodities such as chlorine for water and propane for care centres.
Some 9,300 conductors, engineers and yard workers at CN and CPKC have been bargaining on and off over a pair of new collective agreements for months.
The labour tribunal ordered a 13-day cooling-off period as part of the dual decisions Friday. If new deals cannot be reached in that window, countrywide lockouts or strikes by employees — represented by the Teamsters Canada Rail Conference (TCRC) — could kick off as early as Aug. 22.
Late Friday afternoon, Canadian Pacific said it will lock out 3,300 employees one minute after midnight on Aug. 22 unless a deal is secured.
“If no resolution is reached during bargaining through the extended cooling-off period, and the TCRC continues to refuse binding interest arbitration, CPKC will have no choice but to take this action,” the company said in a release, citing supply chain stability.
CN called on the federal government to impose binding arbitration, saying it has “lost faith” in the negotiating process. A phased shutdown of its network would also culminate in an Aug. 22 lockout of 6,000 workers, it said.
The union said its focus remains good-faith bargaining. “Whether or not this is possible is entirely up to CN and CPKC,” said spokesman Christopher Monette.
Shippers and producers say the potential stoppage at CN or CPKC — or both simultaneously — would halt freight traffic, clog ports and disrupt industries.
In May, then-labour minister Seamus O’Regan asked the industrial relations board to review whether a work stoppage would jeopardize Canadians’ health and safety after union members voted overwhelming to approve a strike mandate. Friday’s ruling effectively “places the parties back in the position they were in” before the ministerial referral, the board wrote.
“There is no doubt that a work stoppage at CN would result in inconvenience, economic hardship and, possibly, as some groups and organizations have suggested, harm to Canada’s global reputation as a reliable trading partner,” the tribunal said in a unanimous decision.
However, the question of what constitutes an essential service under the Canada Labour Code is “very narrow,” it continued.
“The board is satisfied that, at this time, a strike or lockout at CN would not pose an immediate and serious danger to the safety or health of the public.”
The tribunal came to the same conclusion in a separate ruling concerning Canadian Pacific.
Sticking points at the bargaining table boil down to crew scheduling, fatigue management and safety, the Teamsters said. The union has rejected binding arbitration with both companies.
Each side says the other has made excessive demands that led to a weeks-long bargaining impasse.
Canadian railways haul about $380 billion worth of goods and more than half of the country’s total exports each year, according to the Railway Association of Canada.
Anxiety over a strike by thousands of employees has already cost the two railways some business after some customers started to reroute cargo following the union’s strike mandate authorization on May 1.
Federal Labour Minister Steven MacKinnon, who replaced O’Regan after the latter resigned from cabinet three weeks ago, said the two sides need to hash out a deal themselves rather than rely on government intervention, such as back-to-work legislation.
“I call upon the parties to stay at the bargaining table and continue holding productive and substantive discussions that meet the needs of this moment. A negotiated agreement is the best way forward,” he said in a statement Friday.
The stance differed from that adopted by industry — the players most frustrated by Friday’s ruling — in a message to the prime minister.
“We are writing to urge you to immediately intervene and do everything necessary to avert a disruption,” stated the joint letter from 70-plus industry groups and 40 chambers of commerce.
The organizations warned that a prolonged stoppage would strangle the goods pipeline, drive up prices and aggravate affordability problems for businesses and individuals, on top of the risk of furloughs at companies forced to suspend operations.
Commuters could feel the effects of a work stoppage as well.
Should one occur involving the 80 CPKC rail traffic controllers negotiating for a contract — distinct from CPKC’s main bargaining group — passenger trains that run on Canadian Pacific-owned tracks in Vancouver, Toronto and Montreal could shut down.
Factories would also face back-ups right away, said Dennis Darby, CEO of Canadian Manufacturers & Exporters.
“You pay penalties because you’re delayed delivery,” he said in an interview.
“Canadians don’t realize how integrated our manufacturing sector is and how small the inventories are. That’s why stuff is moving all the time.”
Bob Masterson, CEO of Chemistry Industry Association of Canada, called the tribunal decision “disappointing.”
“There’s no plan B,” said Masterson, whose organization represents producers of plastics and chemicals.
About 80 per cent of the sector’s $100 billion in annual shipments relies on rail transport, much of it going to U.S. automakers but plenty bound for Canadian municipalities that need chlorine to disinfect drinking water, he said.
“The government has asked us, ‘What about trucks?’ No. 1, what trucks? We already have a driver shortage,” he said in an interview.
One railcar amounts to three big rigs’ worth of commodities, he said. “And every day we move 530 railcars. So somehow, at short notice, we’re going to find 1,500 to 2,000 more trucks to carry our product, as well as everybody else trying to? That’s just not possible at all.”
This report by The Canadian Press was first published Aug. 9, 2024.
Companies in this story: (TSX:CNR, TSX:CP)
