***UPDATE as of 6:00am CST Friday, August 23rd: Canadian government has moved to end the lockout via arbitration. CN workers expected to return to work on Friday with CPKC waiting for an official order from the CIRB.
(FARGO, ND)– A much talked about potential rail stoppage in Canada has officially begun, creating uncertainty about cross border trade between the U.S. and Canada that could have major impacts on things like agriculture.
At 12:01 a.m. EST on Thursday, August 22nd, both major railroads in Canada officially locked out union workers as negotiations have not yielded a new contract. Both Canadian Pacific Kansas City and Canadian National have been negotiating with Teamsters Canada Rail Conference for months, with talks turning contentious.
Real Ag Radio host Shaun Haney says the word unprecedented being used in this case is probably an understatement. “This is something that has never happened in the country of Canada,” according to Haney. “Both national railways, as you mentioned, both stopped as of midnight on August 22nd. No trains moving. So it is a quiet country and for a country that is so geographically large, similar to the United States, rail is an important component of a lot of goods going in and out of the country. This is going to take its toll very, very quickly on a lot of things, not just agriculture. But also for just Canadians in general.”
Haney says the gap in negotiations is big and he also believes that some of this is politically motivated. “When you read some of the press releases from the union, as well as from the railways they both, you know, they both mentioned this gap and it’s not just silly about hourly pay,” according to Haney. “A lot of this is about scheduling and days off and safety and things like that. CN has been very communicative when it comes to putting numbers on the board. Here’s what engineers make. What do you think about this? Almost kind of trying to sway Canadians in their direction for sure.”
He adds that “Farm groups and actually the railways, CN has been putting a bunch of stuff on social media the past two days, pushing for binding arbitration. And I, and I think that’s, you know, that seems to be from that side of the equation, industry groups, as well as the railways, that seems to be the real quick way to a conclusion on this strike. It also shows that I think the railways think they have negotiating leverage when it comes, if there was to actually be binding arbitration put in place, but the labor minister for Canada, minister McKinnon said last Friday that he would not force the two sides into binding arbitration.
Haney continues, “And so we have a situation where the liberals are definitely trying to regain some of the popularity as the current government and the unions are a path to that. So they are going to slow play this. And it seems that even though there’s significant consequences to Canadian economy, the votes are more important.”
Both major Canadian railroads have never shut down at the same time due to a labor dispute. Canadian Pacific had an almost three day work stoppage in 2022 and Canadian National had a nine-day strike in 2019.
In a statement Thursday, National Grain and Feed Association (NGFA) President and CEO Mike Seyfert said “The current shutdown of major Canadian rail lines is inflicting a severe shock to the North American agricultural supply chain. The agricultural industries of the U.S., Canada, and Mexico are inextricably linked. A shutdown to any part of the system quickly reverberates across the entire system. This supply chain depends on the freight rail services provided by CN and CPKC. Canada, as the world’s leading exporter of canola and potash fertilizer, and the third-largest exporter of wheat, plays a critical role in global agriculture and must have access to rail service to maintain that role.”
So far, the Canadian government has not gotten involved to avoid the lockout of some 9,000 railroad employees despite calls from groups on both sides of the U.S./Canada border to do so. Reports are that nearly a third of the freight handled by the two railroads crossed the U.S./Canada border.
This is a developing story. Stay tuned for more updates. You can also listen to our full conversation with Shaun Haney from Real Ag Radio below:
