National rail strike: Labour minister steps in to get trains rolling again (2024)

Labour Minister Steven MacKinnon has exercised his powers under the Labour Code to send the two sides in the national rail strike to binding arbitration.

MacKinnon stepped in Thursday on the first day of an unprecedented lockout by the country’s two largest rail companies, askingthe Canada Industrial Relations Board to impose final, binding arbitration.

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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.

But he couldn’t say when trains will start moving and the disruption will end for business and for thousands of commuters in Toronto, Montreal and Vancouver.

“If you’re sensing any lack of clarity on that from me, it’s because there’s an independent agency tribunal involved here who must follow their own process,” MacKinnon said Thursday.

“Obviously, I’m acting at a very early stage here and hoping they will act with similar dispatch. I assume that the trains will be running within days but, again, I want to be deferential to the process that will unfold here.”

MacKinnon said the collective bargaining process is up to the companies and the Teamsters Canada Rail Conference union. After months of increasingly bitter negotiations, shipments at Canadian National Railway Co. (CN) and Canadian Pacific Kansas City Ltd. (CPKC) ground to a halt Wednesday night as talks broke off.

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

In B.C., Metro Vancouver’s West Coast Express was suspended Thursday morning, leaving commuters between Mission and downtown Vancouver without rail service. TransLink said it is bringing in extra buses to help move riders.

The West Coast Express cannot run during a work stoppage because it operates on rail owned by CPKC and it can’t rely on the company’s dispatchers and rail workers.

After the minister’s orders, CN said it ended its lockout of workers and CPKC says it is preparing to resume operations.

But TransLink said the West Coast Express will remain suspended through Friday and until “further clarity is given by CPKC on when trains can operate again.”

Trains ground to a halt as 9,300 workers at CN and CPKC were locked out after contract talks broke off late Wednesday night.

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The shutdown will have a huge impact on households and businesses, said business groups, which are calling on the federal government to intervene.

“This afternoon’s announcement from the federal government is welcome news,” said Bridgitte Anderson, president and CEO of the Greater Vancouver Board of Trade, in a statement Thursday afternoon. “A prolonged work stoppage would have been disastrous for our national economy and our reputation as a trading partner.

“It was regular Canadians and small business owners who stood to bear the worst impacts, from loss of income to increased costs of everyday goods.

“This work stoppage had been brewing for months, and millions worth of goods and products had already been diverted from Canada as companies prepared for it. We are also not fully out of the woods as other labour disputes are threatening our west coast ports.

“Moving forward, we urge the federal government to use this example to establish a framework for future actions for other nationally significant sectors.”

Finance professor Andrey Pavlov at Simon Fraser University said a prolonged rail stoppage would hit families and businesses particularly hard at a time when many are already struggling with the effects of high interest rates and inflation.

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“It’s never a good time, but right now it’s going to be very painful because we were just about to get over that huge inflation crisis …, and obviously an inability to move goods can derail that very quickly,” he said.

The lockout and strike would generate shortages and supply disruptions, which could rekindle inflation, he added.

“It could potentially be quite devastating because it puts pressure on prices and at the same time, it makes it more difficult for people to earn money.”

Large corporations and big-box retailers will be able to withstand the effects of prolonged job action because they have larger inventories, but small businesses and sole proprietorships — “the little people” — will be most vulnerable to supply shortages, he noted.

“They cannot afford to have a large inventory and rely on relatively timely deliveries to run the business. If those get delayed just a little bit, small businesses won’t have enough and don’t have the leverage to find alternative supply on short notice.”

A prolonged rail strike would be “untenable” for the 36,000 B.C. businesses it represents, said the B.C. Chamber of Commerce CEO Fiona Famulak, noting that last year’s 13-day port strike also had a significant economic toll on its members.

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“It will also cause further damage to our reputation as a reliable trading partner and consistent component of international supply chains.”

The B.C. New Car Dealers Association said its industry cannot afford a rail service disruption that could stop new inventories from coming into the province.

“It means that consumers who have ordered vehicles or dealers who are in the process of ordering vehicles won’t be seeing them anytime soon — and as inventories are sold or delivered, they won’t be replenished,” said president Blair Qualey.

“The same challenges extend to consumers in need of vehicle repairs or servicing, as access to parts would also be impacted by a rail service stoppage.”

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

“The minister of labour must use the tools at his disposal to immediately resolve this conflict through binding arbitration,” said Canadian Chamber of Commerce chief executive Perrin Beatty in a statement Thursday, adding that Ottawa could have prevented the unprecedented shutdown but chose not to.

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The Teamsters Canada Rail Conference has begun posting pictures to social media of workers from Halifax to Vancouver setting up picket lines, with workers demonstrating outside CN’s headquarters in downtown Montreal as well.

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

The impasse affects upwards of 32,000 commuters in Toronto, Montreal and Vancouver, whose lines run on CPKC-owned tracks.

“The rail shutdown at CN and CPKC is already costing workers, transit users and businesses across the country, and we cannot afford to let things get worse,” Ontario Premier Doug Ford posted on X on Thursday morning.

The shutdown marks the first simultaneous work stoppage by both rail companies, which haul about $1 billion in goods each day, said the Railway Association of Canada. The transport of some goods have been pre-emptively stopped to avoid having cargo stranded.

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,” said Teamsters president Paul Boucher in a statement early Thursday.

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

The Teamsters have said both companies are pushing to weaken protections around rest periods and scheduling, while CN is also seeking a scheme that would see some employees move to far-flung locations for several months at a time to fill labour gaps.

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 said.

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

What’s the difference between a strike and a lockout?

On Wednesday evening, 9,300 workers at CN and CPKC were locked out after contract talks broke off.

A lockout is different from a strike. A lockout is initiated by the employer closing a workplace or suspending work, preventing employees from working at all. A strike is initiated by a union and its members, by refusing to show up for work or to perform certain work.

Both are used as tactics to pressure the other side into agreeing to a proposal or certain terms.

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