The same day Canada’s industrial labor board paved the way for union rail workers throughout the country to strike, the railroads hit back with a threat to lock out the employees.
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On Friday, Canadian National Railway (CN) and Canadian Pacific Kansas City (CPKC) both said they would implement a lockout of the 9,300 conductors, engineers and yard workers represented by the Teamsters Canada Rail Conference (TCRC) on Aug. 22 if a new contract was not reached.
Aug. 22 is the earliest date the workers can go on strike, with the union already indicating it would file the required 72-hour strike notice on Aug. 19 ahead of any labor action if a deal is not made.
Both railroads have also offered the union to resolve the current labor dispute through binding interest arbitration, proposals that the Teamsters already have denied from both CN and CPKC. In such a case, both bargaining parties bring on a mutually agreed upon independent arbitrator to determine the terms of a settlement.
CN formally called on Canada’s federal government to deploy binding arbitration in the dispute.
“Unless there is immediate and meaningful progress at the negotiating table or binding arbitration, CN will have no choice but to begin a phased and progressive shutdown of its network, starting with embargoes of hazardous goods, which would culminate in a lockout,” the railroad said.
CPKC repeated CN’s “no choice” rhetoric in its own public notice, which it said it was providing to mitigate uncertainty and give customers and supply chains proper time to plan “for a safe and orderly shutdown of railway operations.”
“As part of those preparations, CPKC will issue an embargo for all toxic by inhalation dangerous goods traffic to allow this traffic to safely exit the rail network prior to a work stoppage,” CPKC said.
CN says it has made four offers to the TCRC since the beginning of 2024, with the union rejecting all offers and making no counterproposals.
CPKC’s statement said it will “conditionally withdraw” an offer for a time-based agreement and focus on a three-year contract with “competitive wage increases that are consistent with recent settlements with other railway unions and maintains the status quo for all work rules.”
The railroads’ response came amid the Canada Industrial Relations Board’s (CIRB) ruling that a work stoppage would not pose a threat to public health. The board admitted, however, that a strike would be detrimental to the country’s reputation as a reliable trading partner.
Labour Minister Steven MacKinnon met with the parties on Aug. 4, ultimately reviving the contract negotiations after months of stalling in the wake of the CIRB’s months-long review. Federal mediators joined in on the second meeting on Aug. 7.
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According to CN, no progress has since been made as the TCRC “has not engaged meaningfully at the negotiating table.”
A TCRC spokesperson said the railroads’ calls for a lockout were “unexpected and needlessly antagonizing.”
“This move represents an unnecessary escalation that goes against the principles of good faith bargaining that CN and CPKC claims to uphold,” the representative said.
The two prior collective agreements expired on Dec. 31, 2023, but have been extended under Canadian law until the parties reach a new deal.
Industrial organizations have voiced their concerns of a work stoppage, calling on federal intervention to end the strike threat.
Following the CIRB decision, the Business Council of Canada released a letter calling for immediate federal intervention to stop the labor disruption. The letter was co-signed by nearly 100 business groups and industry associations, and is addressed to Prime Minister Justin Trudeau, MacKinnon and Transport Minister Pablo Rodriguez.
“In addition to the overall harm to the economy and jobs, a national work stoppage would also drive up prices for essential goods at a time when Canadians are facing affordability challenges,” the letter said.
Additionally, the Canadian Manufacturers & Exporters (CME) called for emergency meetings of the government’s House of Commons Standing Committee on Transportation. The association says a rail stoppage of any length would have a “catastrophic” impact on Canadian manufacturers and their worker.
“This is the most important issue facing the Canadian economy and it is essential that all Members of Parliament hear directly from employers about the supply chain chaos and economic costs that a nationwide rail stoppage will impose on our country,” the CME said Friday.
Manufacturers would incur an average financial impact of $275,000 Canadian dollars ($200,000) each day of a stoppage, the group said. According to a recent CME survey of 226 manufacturers, 66 percent said a strike will have severe consequences on their operations.
Logistics operations are likely to be the most impacted, with 92 percent of manufacturers expecting delivery delays. Additionally, 76 percent expect to face increased costs, 57 percent expect reduced sales and 49 percent say a work stoppage will reduce competitiveness.
Canadian Rail Negotiations Resume Ahead of Labor Board Ruling
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