Canada’s freight rail network is at risk of a complete stoppage this week as the country’s two largest railroad operators, Canadian National Railway and Canadian Pacific Kansas City, have issued lockout notices to the Teamsters union representing nearly 10,000 workers. Unless last-minute deals are reached, both companies plan to lock out workers from the early hours of Thursday. This is the first time that Canada is facing a simultaneous labor stoppage at the railroad firms, as they typically negotiate their labor agreements in alternate years. The potential stoppages could severely impact the shipment of food grains, beans, potash, coal, and timber, which are major components of Canada’s exports, as well as disrupt shipments of petroleum products, chemicals, and cars.
The economic toll of the potential stoppages could amount to billions of dollars and could also disrupt rail trade across North America. Canadian National Railway stated that if there is no immediate resolution to the labor conflict, they will have no choice but to gradually shut down their network, leading to a lockout. Despite negotiations over the weekend, no meaningful progress has been made, and both parties remain far apart in their positions. The Teamsters union argues that Canadian National wants to implement a forced relocation provision that would require workers to move across Canada for months at a time to address labor shortages, while CN states they have made offers on wages, rest, and labor availability in compliance with government-mandated rules on duty and rest periods.
The dispute with Canadian Pacific Kansas City centers on safety issues, with the union claiming that the firm wants to eliminate all safety-critical fatigue provisions from the collective agreement, potentially increasing the risk of accidents due to crews being forced to stay awake longer. CPKC maintains that their offer does not compromise safety, maintains the status quo for work rules, and complies with new regulatory requirements for rest. The Teamsters, representing yard workers, rail traffic controllers, locomotive engineers, and conductors, have issued a 72-hour strike notice to CPKC and urged members to treat the lockout notice by CN as if they were on strike, emphasizing their commitment to defending the rights and safety of their members.
Both Canadian National and Canadian Pacific Kansas City have stated that their networks outside of Canada will continue to operate, but the stoppages could have ripple effects. The networks of the two Canadian rail operators connect with key U.S. rail and shipping hubs such as Chicago, New Orleans, Minneapolis, and Memphis, with CPKC’s network extending further south to ports on both the east and west coasts of Mexico. The federal Liberal government in Canada has thus far refused to intervene in the dispute, opting for the companies and unions to resolve their differences through negotiations. The potential halt in the freight rail network poses significant challenges, not only for the companies and union involved but also for the broader economy and trade networks across North America.
