MONTREAL — Ottawa is stepping in to get freight trains moving again hours after an unprecedented lockout by the country's two largest railways brought cross-country freight traffic to a standstill.
Labour Minister Steven MacKinnon said Thursday he will use his Labour Code powers to ask the Canada Industrial Relations Board to impose final, binding arbitration in the dispute involving the Teamsters Canada Rail Conference union, Canadian National Railway Co., and Canadian Pacific Kansas City Ltd.
MacKinnon said he has also asked the board to order the railways to resume operations under the terms of the current collective agreements until new deals are in place.
He said the collective bargaining process is the best way to resolve such disputes, but the lockout is affecting all Canadians.
"Millions of Canadians rely on our railways every day," MacKinnon said at a Thursday afternoon news conference.
"The impacts cannot be understated and they extend to every corner of this country."
MacKinnon said the Liberal government will also examine the underlying reasons for the work stoppage.
"It is the government’s responsibility to ensure industrial peace in this critically vital sector. Thus we will be examining why we experience repeated conflicts in the railway sector and the conditions that led to the parallel work stoppages we are seeing.”
Just after midnight Thursday, the two rail carriers locked out close to 10,000 employees, including engineers, conductors, dispatchers and yard workers after the two sides failed to agree to a new contract. CPKC workers began a strike at the same time, said MacKinnon.
Each side has accused the other of failing to negotiate seriously. Both railways had called for binding arbitration, which the union has rejected.
"We believe that this thing has to be settled at the bargaining table," Teamsters Canada president François Laporte told reporters in Montreal earlier Thursday.
"We don't believe in letting a third party decide what's going to be the working conditions of these people for the next two, three, four, five years."
Rail workers from Halifax to Vancouver set up picket lines on Thursday morning, while sign-toting employees demonstrated outside CN's headquarters in downtown Montreal and CPKC's head office in Calgary.
Railways ship about $1 billion in goods each day, says the Railway Association of Canada. Most of the 180,000-plus railcars that CN and CPKC haul weekly — moving everything from cars to clothes, computers, wheat and fertilizer — were already sidelined by Wednesday under a phased wind-down that began last week.
Credit rating agency Moody's warned the work stoppage could cost the Canadian economy $341 million per day, with agriculture, forestry and manufacturing among the hardest-hit sectors.
The impasse also affected about 32,000 commuters in Toronto, Montreal and Vancouver whose lines run on CPKC-owned tracks. Passenger trains cannot roll along those rails without the 80 locked-out traffic controllers to dispatch them.
Pressure from industry and government to resolve the impasse has been mounting for weeks, with the calls intensifying once the work stoppage kicked off.
Prime Minister Justin Trudeau had called on both sides to work out a deal at the bargaining table.
The Teamsters represent 6,000 CN workers and 3,300 CPKC workers. The two companies typically hammer out new deals with employees a year apart. But in 2022, CN asked for a yearlong extension to the current collective agreement, moving the bargaining periods into lockstep.
The union has said both companies were pushing to weaken protections around rest periods and scheduling. CN also aims to implement a "relocation scheme" that would see some employees move to far-flung locations for several months at a time to fill labour gaps, the Teamsters say.
“They want to get rid of language that would put our health and safety and lifestyle in jeopardy," Laporte said.
CN said it has negotiated in good faith over the past nine months.
"The company consistently proposed serious offers, with better pay, improved rest and more predictable schedules. The Teamsters have not shown any urgency or desire to reach a deal that is good for employees, the company and the economy," CN said.
Engineers — drivers — earn $150,000 a year on average and conductors, whose role involves placing cars and loading cargo, earn $121,000 before benefits, according to CN. It says they work roughly 160 days a year — shifts that can involve long hours in freezing conditions far from home.
CPKC has said employees earn comparable, slightly lower amounts.
That railroad operator said Thursday it has sought a three-year "status quo" contract — no fundamental changes — with higher wages that outpace inflation.
The effects of the work stoppage have rippled beyond Canada's borders.
U.S. railways have had to turn away Canada-bound shipments. American shippers also rely on Canada's two main railways, whose tracks run to the Gulf of Mexico and, in CPKC's case, to terminals in southern Mexico.
Meanwhile, Canadian ports have feared containers would pile up on the docks as cargo goes unmoved, prompting some carriers to reroute to U.S. terminals.
This report by The Canadian Press was first published Aug. 22, 2024.
Companies in this story: (TSX: CNR, TSX: CP)
— With files from Morgan Lowrie in Montreal and Bill Graveland in Calgary
Christopher Reynolds, The Canadian Press
