TORONTO (AP) — Canadian National Railroad is moving forward with a plan to end its lockout immediately and get its trains moving again following a government order Thursday to enter mandatory arbitration with its labor union, a railway official said.
The Canadian government brought CN and CPKC railroads to arbitration on Thursday, ending a lockout that began overnight.
A railway official spoke to The Associated Press on condition of anonymity because he was not authorized to share news ahead of the announcement. It’s not immediately clear how quickly trains will run, but ending the lockout is a first step. CPKC is yet to say when it will end its lockdown.
This decision by the government helped to avoid the possible Severe economic consequences For businesses and consumers across the country and in the United States
Minutes after The Associated Press broke the story, Labor Minister Steven McKinnon announced the decision to order the jury at a news conference Thursday, citing an official familiar with the situation who was not allowed to speak publicly before the official announcement.
The dispute involves the country’s two major freight railroads — Canadian National and CPKC — and the Teamsters Canadian Rail Conference, a union representing nearly 10,000 engineers, conductors and dispatchers.
Both CN and CPKC have said trains will be able to move again once the dispute enters arbitration, but it was not immediately clear how quickly that would happen. MacKinnon said he expects it to be there within days.
The railroads locked out their employees after the 12:01 am EDT deadline. To resolve the dispute The union was passed without compromise.
Talks resumed later in the day – as workers staged a sit-in outside as business groups urged the government to force mediation.
MacKinnon said the government wanted to give the talks every chance to succeed, but ultimately the economic risk was too great to allow the shutdowns to continue. He declined to instruct a jury a week ago.
“Canada’s economy cannot afford to wait for an agreement that has been delayed for too long and there is fundamental disagreement between the parties,” he said.
Almost all of Canada’s cargo is handled by rail — worth more than $1 billion Canadian (US$730 million) a day and adding up to more than 375 million tonnes last year — with rail shipments crossing the U.S. border halted on Thursday. About 30,000 passengers in Canada are also affected because their trains use CPKC’s routes. CPKC and CN’s trains continued to run in the US and Mexico during the lockout.
AP reporter Donna Warder A contract dispute involving Canada’s two major freight railroads could have significant economic consequences for Canada and the United States.
Many companies and industries in both countries rely on railroads to deliver their raw materials and finished products, so they were worried about the crisis without regular train service. According to the U.S. Department of Transportation, billions of dollars in goods move between Canada and the United States by rail each month.
Paul Boucher, president of the Teamsters Canadian Rail Conference, said Thursday morning that he believes the railroads are “holding the Canadian economy hostage, forcing the Liberal government to impose final binding arbitration and try to take away your rights to free collective bargaining.”
For fear of offending unions and the left-wing NDP, Trudeau decided not to force the parties into binding arbitration before the deadline, which the left-wing party relies on for support to stay in power.
In anticipation of the shutdown, the White House convened a multi-agency Supply Chain Disruption Task Force to assess the potential impact on American consumers, businesses and workers, according to a Biden administration official. The official was not authorized to comment publicly and spoke on condition of anonymity.
Most businesses can keep enough materials on hand and in room to store finished products to withstand a brief disruption. But ports and other railroads quickly become clogged with cargo shipments that Canadian National and CPKC do not pick up.
Edward Jones analyst Jeff Windau said many companies have made supply chain changes since the Covid-19 pandemic to help them withstand shorter disruptions. If it drags on the real trouble starts.
Earlier Canadian rail stops lasted only a day or two and usually involved only one of the major railroads, but some extended to eight or nine days. This time the damage has increased as both the railway lines have been stopped.
“They’re very integrated and tied to the economy,” Windau said. “The breadth of things they’re hauling. … Ultimately, I think we need the rails to keep running.”
Chemical businesses and food distributors will be the first to be affected. Railroads stopped accepting new shipments of hazardous materials and perishables as they were phased out last week, but most chemical plants said they would be OK for another week.
The auto sector could also quickly see problems, with significant cross-border deliveries of engines, parts and finished vehicles relying on just-in-time shipments. Flavio Volpe, president of the Auto Parts Manufacturers Association, posted in X that nearly four out of every five cars manufactured in Canada are exported to the United States by rail. He said a prolonged shutdown could result in temporary work stoppages similar to the impact of the five-day 2022 Ambassador Bridge blockade.
Union Pacific, one of the U.S. railroads that regularly handles freight to and from Canadians, said the stoppage “will keep thousands of cars a day from moving across the border.”
“Everything from grains and fertilizers to lumber for building houses could be affected during the critical summer season,” Union Pacific said in a statement Thursday.
More than 30,000 commuters in Vancouver, Toronto and Montreal felt the pain of the lockdowns firsthand. They had to scramble on Thursday morning to find a new way to work as their passenger trains could not run while CPKC was closed.
CN has been negotiating with the Teamsters for nine months, while CPKC has been trying to reach an agreement for a year, the union said.
Canadian negotiations have been bogged down by concerns about the way rail workers are scheduled and rules designed to prevent fatigue, as well as issues related to providing train workers with adequate rest. Both railroads have proposed moving away from the existing system to an hourly system that pays workers based on miles traveled, which they say will make it easier to provide predictable hours. The union said it did not want to lose hard-fought fatigue protections.
The railways said the hikes are in line with recent deals in the industry and include their contractual concessions. Engineers already earn about $150,000 a year at Canadian National, while conductors earn $120,000, and CPKC says its pay is comparable.
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Funk reported from Omaha, Nebraska. Associated Press writer Amir Madani in Buellton, California, contributed to this report.
