Feds to force binding arbitration, return to work in railway labour ...

Michael Joel-Hansen

Saskatoon StarPhoenix

Facing a historic shutdown of Canada’s two major railways — job action that would have massive repercussions in Saskatchewan — the federal government is stepping in to get trains moving again.

Late on Thursday afternoon, Labour Minister Steven MacKinnon said the federal government will ask the Canada Industrial Relations Board to end the lockout at the country’s two biggest rail companies. MacKinnon said he’s asking the board to order a return to work and to impose binding arbitration.

He’s also asked the board to order the railways to resume operations under the terms of the current collective agreements until new deals are in place.

MacKinnon says the collective bargaining process is ultimately up to the companies and the Teamsters Canada Rail Conference union, but the lockout is affecting all Canadians.

After months of increasingly bitter negotiations, shipments at Canadian National Railway Co. and Canadian Pacific Kansas City Ltd. ground to a halt Wednesday night as talks broke off. CN and CPKC then locked out 9,300 engineers, conductors and yard workers after the parties failed to agree on a new contract before the midnight deadline.

Both railways have called for binding arbitration, but the union rejected those calls.

The two companies have never had a labour dispute at the same time before. A shutdown was estimated to prevent $1 billion in trade from moving every day.

Shortly after the feds announced they were stepping in, Saskatchewan Premier Scott Moe said on X — formerly known as Twitter — that the Canadian government “took the appropriate action, imposing binding arbitration on all parties and extending the current collective agreements to end the rail stoppage and ensure our Canadian products are moving to market again.”

The Saskatchewan government had on Thursday continued to stress the importance of a resolution to the dispute.

A rail disruption would “be devastating for Saskatchewan producers and the entire Canadian economy,” Saskatchewan Highways Minister Lori Carr said.

“While we understand and respect the right to fair labour practices and negotiations, we must also recognize the far-reaching consequences this work disruption will cause,” Agriculture Minister David Marit said before the binding arbitration was sought by the feds.

Saskatchewan NDP Opposition Leader Carla Beck said she “cleared her calendar” to play whatever role she could to push for an end to a rail stoppage the NDP says is “disproportionately impacting” Saskatchewan.

Beck said she spoke with MacKinnon, Teamsters Canada and United Steelworkers leaders, and would call other stakeholders and leaders in western provinces.

“We’re an export-based province in the middle of harvest,” Beck said, adding that she has “heard overwhelmingly the concerns of our producers, and people across Canada need to understand the impact” the stoppage was having on the province.

Federal NDP Leader Jagmeet Singh said earlier on Thursday that his party wouldn’t support any interference in the bargaining process by the Liberals.

The lockout of rail workers was announced as farmers on the prairies are getting into the fields to harvest their crops. The Agricultural Producers Association of Saskatchewan (APAS) on Thursday said a disruption would have a major impact.

APAS said Canada’s grain industry, which exported over $36 billion worth of grain last year, would be looking at losses of $50 million a day due to the disruption in rail service.

“This disruption is not just a logistical nightmare, it’s a critical economic issue for Saskatchewan,” APAS president Ian Boxall said on Thursday, hours before MacKinnon’s order.

“Every day of work stoppage translates to weeks of recovery, magnifying the financial strain on farmers during a crucial time of the year.”

While APAS called for government intervention to end the dispute, another organization was placing blame for the stoppage on the railways.

The National Farmers Union (NFU) said from 2013 to 2023 both CN and CPKC have seen major growth in their annual net income, with CN’s going from $2.6 billion to $5.6 billion while CPKC’s has increased from $875 million to $3.9 billion.

“The ability for railways to make profits in this way has come from management systems that focus on reducing costs,” NFU said in a statement.

The push to reduce costs has fallen on railway workers and farmers, the NFU said, with workers required to work longer shifts while being forced to relocate as farmers bear the brunt of higher transportation costs.

The NFU was calling for a negotiated settlement to end the dispute.

The Grain Growers of Canada said a dispute would cost farmers $43 million a day at first, rising to $50 million a day if it extended into a second week.

Nutrien Ltd. was among those urging both sides to come to an agreement.

In a statement, the Saskatoon potash and fertilizer producer’s chief commercial officer Mark Thompson said the company depends on rail service to ship its goods, which are needed by agricultural producers around the world.

“We are already feeling the impacts of work stoppages on our industry and urge all parties involved to come to a resolution and prevent further damage,” Thompson said.

A few rail cars of potash were scheduled to complete what is a five-day, 4,300-kilometre trek along CN lines from Saskatchewan to Saint John, N.B. on Wednesday night. Others that didn’t have enough time to make it before the lockout kicked in had to be cancelled.

“A dual-rail work stoppage will halt Canadian potash shipments, including those through the Port of Saint John,” said Canpotex’s Natashia Stinka, speaking for the Saskatchewan-based company that moves potash — solely by rail — produced at its mines.

“There is no alternative to rail for shipping potash,” Stinka said. “To give you a sense of the scale of our operations, one week of Canpotex’s train traffic is the equivalent of 10,000 trucks on the road.”

Gerald Aalbers, the mayor of Lloydminster, said his Saskatchewan-Alberta border town dubbed Canada’s “heavy oil capital” could be hit hard if there was a prolonged rail stoppage.

Aalbers said the city’s residents are “hoping for the best but preparing for the worst” as rail stoppages could wreak havoc on a regional transportation network that’s already operating at near capacity.

Some 114,100 barrels of oil are processed each day in Lloydminster, home to both an upgrader and an asphalt refinery, moving downstream through a complex network of railways, pipelines and tanker trucks. Aalbers said rail is often the most economical mode of transport for Lloydminster-made heavy oil products like asphalt.

Aalbers estimated that a prolonged rail stoppage could slow down the city’s economic activity by 20 to 25 per cent, stressing the interdependencies between oil production and other parts of the local economy, such as the retail and hospitality sectors.

Canadian crude-by-rail exports averaged 119,077 barrels per day last year, according to data from the Canada Energy Regulator.

— With files from Alec Salloum, Regina Leader-Post; Postmedia Network; and The Canadian Press