Canada’s freight rail system is on the verge of a significant disruption this week, with the country’s two largest railroad operators—Canadian National Railway (CNR) and Canadian Pacific Kansas City (CPKC)—issuing lockout notices to the Teamsters union, which represents nearly 10,000 workers. If last-minute agreements are not reached, both companies plan to lock out workers starting early Thursday.
This situation marks a historic simultaneous labor stoppage at both firms, as they typically negotiate their labor agreements in alternating years. The potential stoppages could severely impact the shipment of essential goods such as food grains, potash, coal, and timber, which are vital to Canada’s export economy. Additionally, shipments of petroleum products, chemicals, and automobiles could also be affected.
The economic consequences could be substantial, with billions of dollars at stake. The disruptions would not only hit Canada but could also affect rail trade across North America. Canadian National Railway stated that without a prompt resolution to the labor conflict, it would have to proceed with a phased shutdown of its network leading to a lockout.
The Teamsters union claims that CN is attempting to impose a forced relocation provision, requiring workers to move across Canada for extended periods to address labor shortages. In contrast, CN has asserted that it has made multiple offers regarding wages and rest periods while adhering to government regulations.
The dispute with CPKC primarily revolves around safety concerns, with the union alleging that the company aims to eliminate critical safety provisions related to worker fatigue. CPKC, however, contends that its proposal maintains existing work rules and complies with new regulatory requirements for rest.
In response to the lockout notices, the Teamsters issued a 72-hour strike notice to CPKC, emphasizing their commitment to defending the rights and safety of their members.
Both CN and CPKC have indicated that their operations outside Canada will continue, but the lockouts could have broader implications due to the interconnectedness of their networks with key U.S. rail and shipping hubs. The federal Liberal government has so far refrained from intervening, preferring that the companies and unions negotiate a resolution independently.