Nationwide rail network shuts down as contract talks fail

Canada’s largest railroads, Canadian National and Canadian Pacific Kansas City, early Thursday locked out 9,300 union employees represented by the Teamsters Canada Rail Conference (TCRC), shutting down the country’s rail network in a move that is expected to disrupt supply chains across North America.  

The lockout of train crews and control personnel at 12:01 a.m. Eastern time Thursday had been expected after no progress was reported in contract bargaining with federal mediators that ran late into the night. 

The two sides traded charges Thursday, an indication of how far apart they remain on proposals for wages, benefits and scheduling. The union had set up picket lines to protest at a number of locations.

TCRC President Paul Boucher in a video posted online accused the railroads of “holding the Canadian economy hostage in order to pressure the federal government to impose a new contract through binding arbitration.” CN and CPKC had earlier requested arbitration, saying the union had failed to bargain in good faith.

Prime Minister Justin Trudeau has declined to intervene, urging the sides to continue negotiations. This week Labor Minister Steve MacKinnon carried Trudeau’s message to meetings with CN, CPKC and the TCRC. Minister of Public Services and Procurement Jean-Yves Duclos in remarks reported by the CBC said it was “absolutely essential” that the carriers and union quickly reach agreement on a new pact, “the fastest way to get workers back to work and for the economy not to be impacted.”

The stoppage comes in the middle of western Canada’s grain harvest, a vital part of provincial economies in the region. Manitoba Premier Wab Kinew in an interview with the CBC termed the lockout by the railroads “irresponsible” and called on the federal government to intervene.

“CN remains at the table, attempting to reach an agreement that benefits our employees, customers, and the North American economy. We put an offer to the union last night and are waiting to hear back,” a spokesperson said in an email to FreightWaves.

“This offer improved wages and would have seen employees work less days in a month by aligning hours of service in the collective agreement with federally mandated rest provisions,” CN said in a statement referencing its previous offer. “The offer also proposed a pilot project for hourly rates and scheduled shifts on a portion of the network as CN continues to believe this is a better and more predictable framework for our employees.”

Absent a contract agreement or binding arbitration, the railroad said it had “no choice” but to proceed with a lockout. 

At the same time, sources said CN had moved locomotives to the U.S. for servicing and was using the stoppage to get trackwork done. While the lockout affects some passenger services, sources said VIA, Canada’s national long-distance carrier, was “doing well” without competition from freight trains for track and time.

In announcing the lockout, CPKC insisted it had bargained in good faith and reiterated its call for arbitration. “The TCRC leadership continues to make unrealistic demands that would fundamentally impair the railway’s ability to serve our customers with a reliable and cost-competitive transportation service,” it said in the announcement.