Canada’s much-feared railroad stoppage began on Thursday after a last-ditch round of talks between railroad companies and the Canadian Teamsters Union failed to resolve their differences.
Two of Canada’s largest rail freight networks have shut down, while tens of thousands of commuters in major cities were left without transportation.
Canada’s two biggest freight lines, Canadian National Railway (CN) and Canadian Pacific Kansas City (CPKC), made good on their threat to lock out over 9,300 railroad workers, conductors, and engineers on Thursday after the midnight deadline for a new contract passed. The Teamsters Canada Rail Conference simultaneously voted in favor of going on strike.
The stoppage left a billion dollars’ per day worth of shipping in stasis and passenger trains were halted in Montreal, Toronto, and Vancouver because dispatchers from the rail freight companies normally handle passenger traffic in those areas.
Negotiations between the railroad company and the union were tense when they began early this year, and they quickly turned bitter. Each side accuses the other of making unreasonable demands and negotiating in bad faith.
One of the core issues is that the railroad companies want their highly-compensated employees to work longer hours and more flexible schedules to keep operational costs under control. The union says those work schedules would be exploitative and create more employee fatigue, which could lead to more railroad accidents.
“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,” Canadian Teamsters president Paul Boucher charged in a statement released on Thursday morning.
“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 riposted, while CPKC repeated its call for binding arbitration to resolve the dispute.
“We fully understand and appreciate what this work stoppage means for Canadians and our economy,” CPKC said on Thursday.
Binding arbitration would require the blessing of Prime Minister Justin Trudeau’s administration. Trudeau has been staying out of the dispute at the behest of the Canadian left, which believes binding arbitration would favor the railroad companies over their workers.
Trudeau on Wednesday said it was “in the best interest of both sides to continue doing the hard work at the table to find a negotiated resolution,” but he once again refused to take any action that could resolve the impasse.
“Millions of Canadians, of workers, of farmers, of businesses right across the country are counting on both sides to do the work and get to a resolution,” Trudeau said, stating the obvious as the clock ticked down to disaster.
The prime minister is under increasing pressure from Canadian business groups to get involved. The scale of the economic disaster that would result from a railroad stoppage focused many minds over the past few weeks, and now that the unthinkable has actually happened, a note of panic is creeping into the debate.
“From the perspective of Alberta’s rural municipalities, this is not simply a labor issue; it is an economic development issue, it is a community sustainability issue, it is even a food security issue,” warned Rural Municipalities of Alberta president Paul McLauchlin as the strike got underway.
“Not stepping in to protect rural livelihoods and communities will escalate this from a labor dispute into a situation that puts entire rural communities and industries at risk,” McLauchlin said.
“Canadians are already contending with a high cost of living. They need to see decisive leadership from government that puts their families and livelihoods first,” Canadian Chamber of Commerce president Perrin Beatty told CBC News on Thursday.
“The Minister of Labour must use the tools at his disposal to immediately resolve this conflict through binding arbitration,” Beatty demanded.
Minister of Labor Steve MacKinnon has thus far refused to order arbitration on the labor dispute. His office said on Thursday he is holding “meetings all day on this extremely important matter.”
Canada has experienced railroad strikes before but Thursday was the first time both of the major freight rail lines shut down at the same time. Contract negotiations with the two giant corporations are usually staggered to occur in different years to avoid just such a nationwide shutdown, but this time one of the companies asked for an emergency extension, so the labor contracts for both CN and CPKC came up for renewal at the same time.
The United States economy will certainly be impacted by Canada’s railroad shutdown. The National Airlines Council of Canada said on Thursday that rail transportation is critical for delivering fuel to Canada’s big airports, so air travel will soon be disrupted by fuel shortages, including routes connected to the United States.
America’s Union Pacific railroad estimated the Canadian shutdown will sideline over 2,500 rail cars that would normally pass between the U.S. and Canada on a typical day, which means freight capacity on American rail lines will diminish significantly due to the Canadian strike.
CN officials warned that it will take them up to five days to fully recover from each day of the nationwide shutdown, so disruptions in both Canada and the United States are likely to linger for weeks to come.
The situation could grow dramatically worse if American labor union employees decide to respect Canadian picket lines, as the U.S. Brotherhood of Locomotive Engineers and Trainmen gave them permission to do this week.
A large group of trade associations wrote a warning letter to both U.S. and Canadian officials this week, listing many of the “harmful consequences for Canadian and American agricultural producers, the agricultural industry, and both domestic and global food security” that would result from a prolonged rail stoppage.
American consumers already struggling with high inflation under the economic policies of Joe Biden and Kamala Harris will be dismayed to learn that their grocery bills will probably be going up again due to the Canadian rail debacle.
Agricultural company executives warned that food supplies will be immediately disrupted and spoilage will likely damage food stockpiles if the railroad strike persists. Neither the U.S. nor Canadian trucking industries have enough extra capacity to compensate for the loss of Canadian rail freight.
The strike happened at the worst possible time for farmers, as Canada’s harvest season is just getting underway. The Grain Growers of Canada said on Thursday that Canadian farmers will lose $43 million a day during the first week of the strike, and $50 million a day if it runs into a second week.
“The economic impact of this stoppage will be felt far beyond the farm gate. Consumers could see higher prices and shortages of food products that rely on grain, while farmers are left grappling with reduced income,” Grain Growers of Canada chair Andre Harpe warned.
Barry Prentice, director of the transportation institute at the University of Manitoba, sounded a cautiously hopeful note on Thursday by arguing that the impact of the railroad stoppage will be so enormous that both railroad executives and union officials will scramble to end it as quickly as possible.
“I don’t think it can last very long, simply because of the impact on the general economy,” Prentice told the New York Times. “In the past, every time these sorts of things occurred, the government was forced to recall Parliament and passed legislation that put the railways back to work.”
This time, the Canadian far left has disproportionate influence over the shaky Trudeau administration and it is absolutely determined to prevent the government from doing anything the left perceives as helpful to the corporations.
“For too long we have seen Liberals and Conservatives interfere in these types of labor disputes to the advantage of the employer, to the detriment of the worker. That is wrong, and we will oppose that,” Jagmeet Singh, head of the New Democratic Party (NDP), declared on Monday. The NDP is a creation of the Canadian organized labor movement.