Containers stacked at a railway yard near Toronto following unsuccessful negotiation attempts with a major labour union, in Vaughan, Ontarioon Thursday. Picture: Reuters
Canada’s top two railroads locked out more than 9 000 unionised workers, triggering an unprecedented rail stoppage that could cause billions of dollars worth of economic damage and roil North American supply chains.
The companies, Canadian National Railway (CN) and Canadian Pacific Kansas City (CPKC), and the Teamsters union blamed each other for the work stoppage after multiple rounds of contract talks failed to yield a new agreement.
“Throughout this process, CN and CPKC have shown themselves willing to compromise rail safety and tear families apart to earn an extra buck,” Teamsters Canada Rail Conference (TCRC) president Paul Boucher said, adding that the parties were continuing the talks.
The two railroads said in separate statements that they bargained in good faith and had made multiple offers with better pay and working conditions.
“Despite our best efforts, it is clear that a negotiated outcome with the TCRC is not within reach,” CPKC said in a statement on Thursday.
The company on Thursday reiterated its demand for a binding arbitration to resolve the disputes.
The Canadian government has so far asked the railroads and the union to work together and reach an agreement, choosing not to use its power to refer the dispute to binding arbitration.
Business groups and industries sounded alarm over the possible stoppage that they say would raise costs and lead to “devastating consequences”. Ratings agency Moody’s said the rail stoppage could cost over C$341 million (R1.5 billion) per day.
Canada is the world’s second-largest country by area and relies heavily on rail transport, which hauls around C$380bn’s worth of goods annually.
The stoppage is set to cripple shipments of grain, potash and coal while also slowing the transport of petroleum products, chemicals and autos.
Businesses in the US are set to be impacted as well, as the two economies are highly integrated. Rail transport accounted for 14% of total bilateral trade of $382.4bn between the countries in the first half of the year, according to the US Department of Transportation.
CN and CPKC’s coast-to-coast rail networks in Canada connect south of the border and serve as important supply chain links to trade corridors and ports across North America.
The union and the two companies have been in talks for months after the previous contract expired last year but have differed on provisions such as relocation, rest periods and scheduling.
“The main obstacles to reaching an agreement remain the companies’ demands, not union proposals,” Teamsters said on Thursday.
In its latest offer, CN said it improved wages and aligned working hours with federally mandated rest provisions, which it claimed would see employees work fewer days a month.
The union did not respond after it presented the offer, the company said.
The union has opposed CN’s “forced relocation scheme”, which could see workers ordered to move across the country.
CPKC said its offer for Train and Engine division employees included competitive wage hikes and increased shift differentials. Teamsters said that it had put forward multiple offers, none of which were seriously considered by either company.
Analysts say profits at both railroads will take a hit from the strike.
Stephens analyst Daniel Imbro said on Thursday that work stoppages increase the likelihood that the Canadian railroads face outsized wage and benefit increases into next year compared to the US.
Cape Times