Locomotives sit idle at the Canadian Pacific Kansas City rail yard in Port Coquitlam, B.C., Monday, Aug. 19, 2024. THE CANADIAN PRESS/Darryl Dyck Locomotives sit idle at the Canadian Pacific Kansas City rail yard in Port Coquitlam, B.C., Monday, Aug. 19, 2024. THE CANADIAN PRESS/Darryl Dyck

By Canadian Press, CHAT News Staff

National rail shutdown begins as employees locked out at both major Canadian railways

Aug 21, 2024 | 10:26 PM

In a first for Canada, freight traffic on its two largest railways on simultaneously ground to a halt overnight, threatening to upend supply chains trying to move forward from pandemic-related disruptions and a port strike last year.

In the culmination of months of increasingly bitter negotiations, Canadian National Railway Co. and Canadian Pacific Kansas City Ltd. locked out 9,300 engineers, conductors and yard workers after the parties failed to agree on a new contract before Wednesday’s 10:01 p.m. MST deadline.

The impasse also affects tens of thousands of commuters in Toronto, Montreal and Vancouver, whose lines run on CPKC-owned tracks. Without traffic controllers to dispatch them, passenger trains cannot run on those rails.

Pressure from industry groups and government to resolve the bargaining impasse has been mounting for weeks, with calls to hash out a resolution likely to ratchet up further now the work stoppage has begun.

The companies haul a combined $1 billion in goods each day, according to the Railway Association of Canada. Many shipments were pre-emptively stopped to avoid stranding cargo.

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Parties bargained late into the night Wednesday at hotels in Montreal and Calgary before talks broke off shortly before midnight.

Each side has accused the other of failing to negotiate seriously.

“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,” claimed Teamsters president Paul Boucher in a statement early Thursday morning.

Bargaining played out in separate negotiations between each company and the Teamsters, which represents 6,000 CN workers and 3,300 CPKC workers.

CN said it has negotiated in good faith over the past nine months.

“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 stated.

CPKC called for binding arbitration, saying the union has made “unrealistic demands.”

Business groups have also demanded the government step in by imposing binding arbitration and barring strikes and lockouts as the process plays out.

Prime Minister Justin Trudeau called on both sides on Wednesday to work out a deal at the bargaining table.

Affected industries include agriculture, mining, energy, retail, automaking and construction. U.S. railways have also had to turn away Canada-bound shipments.

Shippers south of the border also rely on Canada’s two main railways, whose tracks run to the Gulf of Mexico and, in CPKC’s case, to several Mexican ports.

Meanwhile, Canadian ports fear containers will pile up on the docks as cargo goes unmoved, causing congestion down the line and prompting some carriers to reroute to U.S. terminals.

More than 32,000 rail commuters in Toronto, Montreal and Vancouver will also have to find new routes to the office.

Lines affected by the potential work stoppage are TransLink’s West Coast Express in the Vancouver area, Metrolinx’s Milton line and the Lakeshore line’s Hamilton GO station in the Greater Toronto Area, and Exo’s Candiac, Saint-Jérôme and Vaudreuil/Hudson lines in the Montreal area.

Shutdown impacts Medicine Hat

Companies across the county, including several in Medicine Hat, have been bracing for the shutdown and its expected impact on commerce.

Methanex said in a statement Tuesday it’s been working on ways to keep it’s Medicine Hat plant running in case of the current stoppage scenario.

The methanol distributor said that 75 per cent of it’s product is shipped out by CPKC – and there is no backup plan in case of disruption.

A loss of rail service — even for a short period — could result in a shutdown of its Medicine Hat facility, though not immediately, a spokesperson told CHAT News.

Karen Proud, president and CEO of Fertilizer Canada, said CF Industries in Medicine Hat ships out a similar per cent of its product by rail and shipping by truck isn’t really an option.

“There are not enough trucks on the road to deal with fertilizer products. There just aren’t,” Proud said Tuesday.

“The costs are really significantly more. For a product that is meant for farmers, we can’t add the extra cost into the system, even if that was an option.”