Rail Shutdown: Federal Government Forces Binding Arbitration

Labour Minister Steven MacKinnon speaks at a press conference about the rail labour dispute in Ottawa on Aug. 22, 2024. The Canadian Press/ Patrick Doyle

The federal government is intervening in the railway labour dispute to force arbitration and have the trains moving again.

“As minister of labour, I’m using my authorities under the Canada Labour Code to secure industrial peace and deliver the short and long term solutions that are in the national interest,” Labour Minister Steven MacKinnon said on Aug. 22.

MacKinnon said he’s using section 107 of the Labour Code to direct the Canada Industrial Relations Board to help in having the parties settle the outstanding terms of disagreement by imposing final binding arbitration.

“I have also directed the board to extend the term of the current collective agreements until new agreements have been signed and for operations on both railways to resume forthwith,” he said.

The minister added that the rail shutdown could be over “within days.”

Trains across the country came to a halt in the early hours of Aug. 22 as contract negotiations between the country’s two major rail companies and the union failed to reach a resolution. As a result, 6,000 Canadian National Railway (CN) workers and 3,300 Canadian Pacific Kansas City (CPKC) workers were locked out by the companies.

The rail companies have been negotiating with Teamsters Canada for months. The union says the companies have failed to meet its requests about rest periods and scheduling, as well as ending forced relocation schemes. CN says its “serious offers” with better pay and improved rest and schedules have been dismissed, while CPKC similarly said despite its efforts to bargain in “good faith,” an agreement with the union wasn’t “within reach.”

Canadian railways transport around $380 billion worth of goods annually. As well, around 32,000 commuters in Canada’s major cities rely on the rail system impacted by the shutdown for transportation on a daily basis.

NDP Leader Jagmeet Singh condemned the minister’s intervention in the labour dispute, saying it’s “anti-worker.”

“The Liberal govt’s decision to undermine 9,300 Canadian rail workers with a binding arbitration sends a message to big corporations like CN & CPKC: Being a bad boss pays off,” he said on social media on Aug. 22.

MacKinnon said the railway shutdown has major impact on millions of Canadians.

“Canadians must be assured that their government will not allow them to suffer when parties do not fill their responsibility to them at the bargaining table, especially when worker and community safety is at stake,” he said.

Business and agriculture groups had called on the government to intervene in the dispute before a shutdown occurred, while the government had said it wanted the issue to be resolved at the bargaining table.

“The Government of Canada had the opportunity to prevent an unprecedented shutdown of our Canadian freight rail network and some commuter services in major cities. Unfortunately, it did not act,” Canadian Chamber of Commerce president and CEO Perrin Beatty said in a statement earlier on Aug. 22.

Canadian Federation of Independent Business president and CEO Dan Kelly also said on Aug. 22 that it’s time for the government to find a long-term solution for “addressing labour disputes for critical supply chain industry players.”

During his Aug. 22 press conference, Minister MacKinnon said his government will be looking into why the railway sector experiences “repeated conflicts” and the conditions that led to the latest shutdown.

Jennifer Cowan contributed to this report.