Canada’s freight railways have come to a standstill after negotiations between the rail companies and the labor unions failed to reach an agreement. The disruption is expected to have significant impacts on the supply chain, potentially affecting the transport of goods across the country, including essential commodities like food, fuel, and raw materials.
Canada’s two major freight operators, Canadian National Railway (CN) and Canadian Pacific Kansas City (CPKC), have announced a full shutdown starting Thursday as negotiations with the Teamsters Canada Union have reached an impasse. This decision has locked out more than 10,000 unionized workers, causing an unprecedented halt to supply chains and billions of dollars in economic losses. If prolonged, the strike could lead to disruptions in cross-border trade with the USA, a breakdown of supply chains, and a daily loss of approximately $733 million. Fearing this, both CN and CPKC, along with other industry groups, are lobbying for government arbitration to pressure the union into negotiation.
Workers at Picket Lines for protest
Why did the negotiations failed?
Labour agreements with the operators have been in works since last September. However, both the sides are unable to reach an agreement due to differing opinions on provisions regarding relocations of workers, rest periods for train crew, higher wages, train schedule, and better job conditions. The companies and the Teamsters union blamed each other for not willing to negotiate.
During the Teamsters Canada Rail Conference, Paul Boucher, the union’s president, said that both the Railways were “trying to squeeze even more availability” out of the workers. Leading to “train crews would be forced to stay awake even longer, increasing the risk of derailments and other accidents.” While criticising the companies’s lack of concern over the safety of crew as well as the decision of halting the railways, the Teamsters Union reaffirmed that they are still at the negotiating table with both the companies.
Following months of talks that failed to resolve the issue, the two companies decided to shutdown their operations. On Thursday, CPKC said, “Despite our best efforts, it is clear that a negotiated outcome with the TCRC is not within reach”. The CN also confirmed that the teamsters union “did not respond to another offer by CN in a final attempt to avoid a labour disruption”.
Both the railways claim that the Teamsters union demands are unrealistic and would “fundamentally impair the railway’s ability to serve our customers with a reliable and cost-competitive transportation service.”
The Economic impact of failed negotiations
The lockout can have major economic repercussions not only in Canada but also in US. For an export dependent nation like Canada, almost 50% of all Canadian exports are moved on trains, thus causing huge supply shortages of goods like ammonia, chlorine, pork, aviation fuel, grains, fertiliser, cement, coal, cars, timber, iron ore and also cargo from Asia and Europe. The strike will hit the agriculture, mining and retail industries the most as they are heavily dependent on rail network. In addition thousands of commuters in cities like Montreal, Vancouver and Toronto can be left stranded due to rail stoppage.
Many industry groups have predicted that the strike can cause a loss of almost $733 million dollars a day. Thus, urging the government to force the companies and the union into binding arbitration.
The government response to Failed negotiations
After constant demands from dozens of industries and trade organisations to end the strike, Prime minister Justin Trudeau requested both the side to reach an agreement. While choosing not to intervene in the negotiation, Trudeau said in a brief statement that ,”Millions of Canadians, workers, farmers, businesses, right across the country, are counting on both sides to do the work and get to a resolution.”
However as the situation escalated, The federal labour minister, Steven Mackinnon asked the industrial relations board to issue a back to work order and asked the board to make a binding arbitration between the Teamsters and the companies.
MacKinnon’s decision signaled a shift in stance by Prime Minister Justin Trudeau’s Liberal government, which had previously expressed a preference for resolving the issue through negotiations. “We gave negotiations every possible opportunity to succeed … but we have an impasse here….. And that is why we have come to this decision today.” MacKinnon stated .
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