Unprecedented Canada-Wide Rail Shutdown Begins

CN rail trains are shown at the CN MacMillan Yard in Vaughan, Ont., on June 20, 2022. The Canadian Press/Nathan Denette

Trains across the country have come to a standstill as 9,300 employees were locked out by Canada’s two primary rail companies after attempts to reach a new contract before the 12:01 a.m. EDT deadline failed.

The work stoppage marks the first-ever simultaneous work stoppage at Canadian National Railway (CN) and Canadian Pacific Kansas City (CPKC), raising concerns about potential disruptions to supply chains.

The shutdown comes after months of negotiations between the railway companies and the Teamsters Canada Rail Conference, the union representing 6,000 CN workers and 3,300 CPKC workers.

The two sides bargained late into the night Aug. 21 at hotels in Montreal and Calgary before talks broke off shortly before midnight. Both sides have levelled accusations against the other for failing to be earnest in their negotiations.

“Throughout this process, CN and CPKC have shown themselves willing to compromise rail safety and tear families apart to earn an extra buck,” Teamsters president Paul Boucher said in a statement after the lockout deadline. “The railroads don’t care about farmers, small businesses, supply chains, or their own employees. Their sole focus is boosting their bottom line, even if it means jeopardizing the entire economy.”

CN said it came to the table with another offer of better wages and fewer hours.

“The union did not respond to another offer by CN in a final attempt to avoid a labour disruption,” the company said in an Aug. 22 press release. “Without an agreement or binding arbitration, CN had no choice but to finalize a safe and orderly shutdown and proceed with a lockout.”

CPKC released a similar statement, saying the union continues to make “unrealistic demands” that would “fundamentally impair the railway’s ability to serve our customers with a reliable and cost-competitive transportation service.”

Calls for a Deal

The country’s reliance on rail service both to ship goods as well as to provide transportation had government officials and business groups alike calling on both sides to come to a consensus.

Rail lines carry more than $1 billion worth of goods each day, according to the Railway Association of Canada. More than half of the country’s exports travel by rail.

Prime Minister Justin Trudeau said the rail shutdown would harm millions of Canadians.

“This is an issue that we are following extremely closely and moving forward on in every way we can,” Trudeau said during an Aug. 21 press conference in Quebec.

“It is in the best interest of both sides to continue doing the hard work at the table to find a negotiated resolution. Millions of Canadian workers, farmers, and businesses right across the country are counting on both sides to do the work and get to a resolution.”

Federal Labour Minister Steven MacKinnon has also been urging both sides to intensify their efforts to finalize an agreement. While MacKinnon has the authority to mandate binding arbitration between the union and railway companies, he has yet to indicate he will take such an action.

Economics expert Moshe Lander told The Epoch Times it is likely such an order will be issued if a deal is not reached in the next few weeks.

“I think the issue right now is Parliament’s not sitting, and while they could recall Parliament to debate this and put through that legislation, I think everybody just wants to enjoy their last couple of weeks this summer,” said Lander, senior lecturer at Concordia University in Montreal, on Aug. 20.

Business Backlogs

Canadian Federation of Independent Business (CFIB) director for British Columbia and Western Economic Policy Jairo Yunis told The Epoch Times there was a slowdown in the movement of certain goods even before the lockout due embargoes.

“Each day of a strike can result in days of backlogs,” he said on Aug. 20.

Affected industries include mining, energy, retail, automaking and construction. But it is the agriculture sector—particularly in Western Canada—that will be hit the hardest, Yunis said.

“With the harvest season underway, farmers rely on rail to transport crops to market,” he said. “A prolonged stoppage could result in shortages.”

Even a short strike could cause lengthy disruptions in some industries, he said, noting that the British Columbia Maritime Employers Association has said it takes “months” to fully recover from a strike.

He referenced the 13-day 2023 Vancouver Port strike, saying despite the less than two-week disruption, it took most supply chains four to six weeks to bounce back.

“The Canadian International Freight Forwarders Association estimated that shipment delays lasted two to three months,” he said.

Already, Canadian ports are worried 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.

Shippers south of the border also rely on Canada’s two main railways, whose tracks run to the Gulf of Mexico.

Commuters Stranded

More than 32,000 rail commuters across the country 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, Exo’s Candiac, Saint-Jérôme and Vaudreuil/Hudson lines in the Montreal area and Metrolinx’s lines in the Greater Toronto Area and Hamilton.

Metrolinx spokesperson Andrea Ernesaks told The Epoch Times the company’s Milton line and the Lakeshore line’s Hamilton GO station would be “temporarily suspended.”

“All other GO lines, the UP Express and Lakeshore West line stations would not be impacted,” she said. “Customers on the Milton corridor are encouraged to consider local transit options or access GO Transit services on the Lakeshore West or Kitchener corridors as an alternative.”

The Canadian Press contributed to this report.