Work stoppage at Canadian Pacific Railway prompts fears of more supply-chain woes – The Globe and Mail

Canadian businesses and industry experts are urging Ottawa to intervene in a nationwide work stoppage at Canadian Pacific Railway CP-T that is posing a threat to food inflation, supply chains and the country’s reputation as a reliable agricultural partner.

CP Rail trains ground to a halt and workers took to picket lines on Sunday after the two parties failed to reach a deal by midnight. The labour dispute stands to further exacerbate economic disruptions caused by the pandemic, extreme weather in Western Canada and Russia’s war on Ukraine.

“This is the one labour dispute the world absolutely doesn’t need right now,” said Sylvain Charlebois, director of the Agri-food Analytics Lab at Dalhousie University. “The world is in deficit, agriculturally speaking. We need to produce more grain, we need fertilizers, we need a strong logistical network.

“All eyes are on North America to produce more this year because of what’s happening in Ukraine, so unfortunately this strike is happening at the worst possible time.”

Industry groups call on Ottawa to stop potential CP Rail work stoppage

The Teamsters Canada Rail Conference (TCRC), which represents about 3,000 locomotive engineers, conductors, and train and yard workers, had accused the company of initiating a lockout over the weekend despite the union’s continued interest in bargaining. In doing so, the company demonstrated irresponsibility in labour relations and to the continuity of the Canadian supply chain, the union said.

However, the employer says it was still at the negotiating table in Calgary late Saturday night, with federally appointed mediators, awaiting a response to its latest offer, when the TCRC withdrew service unilaterally before the deadline for a strike or lockout could legally take place.

“This was clearly a failure of the TCRC to negotiate in good faith,” said Canadian Pacific spokesperson Patrick Waldron in an interview on Sunday. “Those actions show a complete disregard for the unnecessary damage that this will cause to the Canadian economy and the supply chain.”

A union spokesperson did not respond to questions about the conflicting statements. The two sides continued discussions with a mediator on Sunday.

Labour Minister Seamus O’Regan said Canadians are counting on a quick resolution. Asked whether the minister was prepared to table back-to-work legislation, Mr. O’Regan’s office said in an e-mail to The Globe and Mail that federal mediators continue to support the parties in negotiations and that “our government believes the best deals are reached by the parties at the table.”

Industry groups are putting pressure on the government to take swift action, saying every day of work stoppage is consequential.

Fertilizer Canada, which represents manufacturers and wholesale and retail distributors, said members are already two to three weeks behind inventories because of poor rail-line service leading into the spring season. The group said the 2021 season saw lower crop yields because of weather conditions and that food security depends on maximizing crops to make up for last year. In addition, it said, there is a brief window for farmers to fertilize their crops.

“Seventy-five per cent of all fertilizer in Canada is moved by rail,” Fertilizer Canada president and CEO Karen Proud said in a statement issued Sunday. “During the lead-up to spring seeding, every day, frankly every hour, counts. During this critical time, our members rely on uninterrupted rail service to deliver their products to their farmer customers in Canada and into international markets.”

The Canadian Federation of Agriculture (CFA) urged Ottawa to employ “every available mechanism” to ensure the dispute ends quickly and successfully. The organization said the work stoppage will damage Canada’s capacity to act as a reliable source of agricultural products to global consumers and have more immediate impacts on livestock feed.

“Disruptions such as this can reverberate and have consequences throughout the entire food supply chain, as Canadians have seen over the past few years,” the CFA said in a statement issued before Sunday’s work stoppage.

Dr. Charlebois, of the Agri-food Analytics Lab, noted that last year’s drought in Western Canada caused a widespread feed shortage for cattle producers, necessitating the importation of grains from the U.S. via rail.

“If all of a sudden, they can’t rely on the rails, they’ll probably sell off all of their inventory early to cut costs, and so going forward, prices could go even higher in the summer and fall. … Railways are really the backbone of our [agricultural] economy.”

The parties have been negotiating since September and remain at odds over more than two dozen outstanding issues, including wages, pensions and work-life balance. The union takes issue, for example, with a clause requiring workers to take their federally mandated break periods at terminals away from home. This would extend the time spent en route by a minimum of 32 hours, the union says, when the intent of the provision was to have the break occur at a home terminal.

“Our members want respect and a fair contract,” said TCRC spokesperson Dave Fulton in a statement.

“They want to work, but they also want to be able to spend time with their families and rest. That’s the least CP can do.”

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