Canadian business and agricultural leaders warn a railway work stoppage would be ‘catastrophic’
Canadian Pacific Railway Ltd. will lock out 3,000 conductors and locomotive engineers if union officials won’t make a deal by this Sunday, March 20, the company said.
CP and Teamsters Canada have been negotiating a new collective agreement since September, and union members earlier this month voted to authorize a strike if necessary. While a strike was possible as of March 16, the union hadn’t yet opted for one. CP said it decided on a lockout to avoid dragging out the situation indefinitely.
“Delaying resolution would only make things worse,” CP chief executive Keith Creel said in a news release. “We take this action with a view to bringing this uncertainty to an end.”
Hours after CP gave notice of the March 20 lockout, Teamsters Canada Rail Conference said the union intends to strike on the same day, according to a statement from federal Labour Minister Seamus O’Regan. He urged both parties to “consider making the compromises necessary to reach a deal” before the March 20 deadline.
“We understand what’s at stake,” O’Regan said in a Tweet on March 16, adding that he and Transport Minister Omar Alghabra are monitoring the situation.
Canadian business and agricultural leaders have been warning that a work stoppage at the railway would be “catastrophic” for the flow of goods across the country, at a time when supply chain disruptions have already driven up food costs to a level not seen in almost 13 years.
This growing season, Canadian grain farmers are under more pressure than usual to produce a good crop, since Russia’s invasion of Ukraine has destabilized farming operations in one of the world’s most important grain-growing regions. At a time when the world needs more Canadian grain, a rail stoppage would “directly damage Canada’s capacity to act as a reliable source,” said the Canadian Federation of Agriculture, which represents more than 200,000 farmers across the country.
Company and union officials have been meeting daily with federal mediators over the past week, but “our positions remain far apart,” CP said.
TCRC, which represents about 3,000 of CP’s engineers, conductors, yardpersons and trainpersons, said the lockout threat will only sour negotiations, not speed them up.
“It doesn’t make any sense,” said Teamsters Canada spokesperson Stéphane Lacroix. “They’re upsetting our negotiators at the negotiation table. It’s really not a good strategy.”
It doesn’t make any sense. They’re upsetting our negotiators at the negotiation table
TCRC has said the main issues are wages, pensions and work rules. But Lacroix said the main issue holding up negotiations is the work rules, since the union has been pushing for more “human” schedules for train staff.
The company noted that the average annual salary is $135,442 for a TCRC locomotive engineer and $107,872 for a conductor, yardperson or trainperson. CP said it tabled an offer on Tuesday that addressed 26 outstanding issues, but the offer was rejected.
In its lockout notice, CP gave TCRC until 12:01 a.m. on March 20 to either come to a negotiated settlement or agree to binding arbitration before a lockout.
“The Canadian economy could avoid all the pain and damage of a work stoppage if the TCRC would agree to binding arbitration,” Creel said.
It’s time to start thinking about making the rail system an essential service
Tom Steve, general manager at the Alberta Wheat and Barley Commissions, said a rail disruption would cause serious operational issues for the coming spring planting season. Farmers depend on rail to carry crucial inputs, such as fertilizer and pesticides, but they also depend indirectly on rail to generate enough cash to cover their spring costs.
Steve said farmers at this time of year tend to sell the last 10 to 20 per cent of the previous season’s harvest to help finance planting. But if a grain company can’t get access to rail capacity, they’ll order less crop from farmers.
“They need the rail cars to move that crop, or they will not call in the deliveries,” he said. “The farmer doesn’t get paid until they dump it in the pit.”
The threat of rail disruptions is a “recurring nightmare” for farmers in Western Canada, where CP dominates much of the southern Prairies and Canadian National Railway Co. dominates the central and northern areas, he said. The geographical split means CP’s clients are likely out of options when service shuts down.
“If CP goes on strike, CN is not able to pick up all that business. It would be virtually impossible,” Steve said, adding that in 2019, a weeklong CN rail strike backed up the entire grain supply chain. Grain shippers move product every week, so missing even one week means “we’re playing catch-up” for the rest of the year.
“It’s time to start thinking about making the rail system an essential service,” he said. “How do we create a more reliable system that isn’t, every few years, held captive by the inability of railways and their unions to get along?”
The Western Grain Elevator Association (WEGA), which represents major grain companies including Cargill Ltd. and Viterra Canada Inc., said both CP and the union need to realize a work stoppage would have “serious consequences” for Canada’s agricultural sector, which is already reeling after last summer’s drought dramatically reduced crop yields.
Grain companies with operations on CP rail lines are “beholden to a monopoly service provider and do not have any competitive options in shipping grain to flour mills, grain processing facilities and feedlots both domestically and internationally,” the association said.
“The world needs Canada’s grain now more than ever, and it is unconscionable that anyone would leverage the current domestic and global circumstances to benefit their individual interests,” WGEA executive director Wade Sobkowich said on March 15.
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