Prime Minister Justin Trudeau hinted Thursday that his government will have an update soon on its plans to find “the right solution” to a historic railway shutdown that’s threatening to upend supply chains.
“We are not taking this lightly because Canadians across the country are worried about it,” he said during a stop in the Eastern Townships region of Quebec.
“We will have more to say shortly on what we are doing to make sure the right solution is found quickly for the economy.”
Freight traffic on the two largest rail networks came to a halt simultaneously on Thursday morning after months of increasingly tense and bitter labour negotiations. It’s the first time ever the two railways have been idle at the same time.
Canadian National Railway Co. (CN) and Canadian Pacific Kansas City Ltd. (CPKC) locked out 9,300 engineers, conductors and yard workers after the parties failed to agree on a new contract before the midnight deadline.
The impasse also affects tens of thousands of commuters in Toronto, Montreal and Vancouver, whose rail lines run on CPKC-owned tracks. Without traffic controllers to dispatch them, passenger trains cannot run on those rails.
Pressure from industry groups and government to resolve the bargaining impasse has been mounting for weeks. Calls to hash out a resolution are likely to ratchet up further now the work stoppage has begun.
The companies haul a combined $1 billion in goods each day, according to the Railway Association of Canada. Many shipments were pre-emptively stopped to avoid stranding cargo.
Negotiations collapse
Parties bargained late into the night Wednesday at hotels in Montreal and Calgary before talks broke off shortly before midnight.
Bargaining played out in separate negotiations between each company and the Teamsters, which represents 6,000 CN workers and 3,300 CPKC workers.
Each side has accused the other of failing to negotiate seriously.
Jonathan Abecassis, director of public affairs and media relations at CN Rail, said that without an agreement or binding arbitration, the company “had no choice” but to lock out employees.
“The Teamsters have shown absolutely no desire to reach a negotiated settlement and prefer to hold Canadian supply chains hostage. We think this is irresponsible, reckless and needs to come to an end as quickly as possible,” he told CBC’s The Current.
“The Teamsters haven’t shown any urgency or any desire to reach a deal that’s good for employees, the company or the economy.”
Abecassis repeated calls for the federal government to intervene with binding arbitration — a process which sees a third party review both sides’ arguments and propose a solution to be put to employees for a vote.
“For the simple reason that we don’t feel we have a partner to negotiate with. You can’t make a deal with an empty chair,” he said.
CPKC also has called for binding arbitration, saying the union has made “unrealistic demands.”
Christopher Monette, public affairs director for Teamsters Canada, rejected those versions of events and accused the two railway companies of colluding to coordinate a shutdown in order to get concessions at the bargaining table.
“This is an employer-driven work stoppage where the main sticking points are company demands for concessions and not union proposals,” he told The Current.
He said the union is fighting for “a more humane rail industry.”
The union has been demanding better wages, benefits and working hours, arguing that what the companies are proposing could lead to fatigue and safety issues.
Abecassis said CN is abiding by government mandated work-rest provisions on which the union collaborated.
“It’s all a bit confusing because the reality of it is that CN can’t offer anything that’s not within the framework of those rules,” he said.
“Both companies are coming after our fatigue protections in our collective agreement,” Monette said. “Our collective agreements provide protections that are superior to the federal minimal standards.”
Business groups calling for binding arbitration
Business groups also have called on the government to step in by imposing binding arbitration and barring strikes and lockouts as the process plays out.
A statement from Perrin Beatty, president and CEO of the Canadian Chamber of Commerce, was critical of the federal government’s role in the dispute, saying it had the opportunity to act but chose not to.
“Canadians are already contending with a high cost of living. They need to see decisive leadership from government that puts their families and livelihoods first,” the statement said.
Minister of Public Services and Procurement Jean-Yves Duclos says ‘the fastest way for workers to get back to work and for the economy not to be impacted’ by the rail stoppage that began early Thursday is for CN Rail, CPKC and the Teamsters union to come to a negotiated agreement.
“The Minister of Labour must use the tools at his disposal to immediately resolve this conflict through binding arbitration,” the statement continued.
Labour Minister Steve MacKinnon’s office provided few details, saying only he “is in meetings all day on this extremely important matter.”
Trudeau had called on both sides to work out a deal at the bargaining table.
Cargo congestion fears
Industries affected by the work stoppage include agriculture, mining, energy, retail, automaking and construction. U.S. railways also have had to turn away Canada-bound shipments.
Shippers south of the border also rely on Canada’s two main railways, whose tracks run to the Gulf of Mexico and, in CPKC’s case, to several Mexican ports.
Trains across Canada came to a halt after 9,300 employees at Canada’s largest railways, Canadian National Railway and Canadian Pacific Kansas City, were locked out.
Meanwhile, Canadian ports fear containers will pile up on the docks as cargo goes unmoved, causing congestion down the line and prompting some carriers to reroute to U.S. terminals.
More than 32,000 rail commuters in Toronto, Montreal and Vancouver will also have to find new routes to the office.
Lines affected by the potential work stoppage are TransLink’s West Coast Express in the Vancouver area, Metrolinx’s Milton line and the Lakeshore line’s Hamilton GO station in the Greater Toronto Area, and Exo’s Candiac, Saint-Jerome and Vaudreuil/Hudson lines in the Montreal area.
Just Asking wants to know: What questions do you have about the rail strike? What would you like to know about its impact on Canada’s supply chain and your day-to-day life? Fill out the details on this form and send us your questions ahead of our show on Aug. 24.