Members of the Teamsters Canada Rail Conference picket outside CPKC headquarters in Calgary, Alta., on Aug. 23, 2024. File | Photo credit: AP
A Canadian mediator appointed to resolve a railroad labor dispute to protect the North American economy has ordered workers at the country’s two major railroads to return to work, allowing both lines to resume operations.
Saturday’s order means Canadian National will be able to continue operating the trains it resumed Friday morning, when it laid off workers. But Canadian Pacific Kansas City will likely not be able to resume its operations before 12:01 a.m. on Monday, when workers were ordered to return.
Railroads play a vital role in the economy, as CPKC and CN deliver more than CA$1 billion (US$730 million) worth of shipments daily and move billions of dollars worth of goods between the U.S. and Canada each month. Although both companies’ trains continued to run in the United States and Mexico, the lockdown caused considerable disruption. Many smaller short-line freight railroads that handled local deliveries continued to operate across Canada, but were unable to hand off shipments to any major railroads due to being idled.
The Teamsters union, which represents the workers, said it would comply with the Canada Industrial Relations Board’s order and send its members back to work, but it would also pursue a legal challenge to the arbitration order.
“This decision by the CIRB sets a dangerous precedent. It signals to corporate Canada that large companies only need to halt their operations for a few hours, there will be short-term economic damage, and the federal government will move to break the union,” said Paul Boucher, president of the Teamsters Canada Rail Conference, which represents more than 9,000 engineers, conductors and dispatchers on both railroads.
“Today, Canadian workers’ rights have diminished significantly,” Boucher said.
Labor Secretary Steven McKinnon ordered the lockout to end only 16 hours after it began, as government officials could not see the economic catastrophe that could ensue if the railroads remained closed.
Mr. MacKinnon mentioned the board’s decision in a post on the social platform X and said he hoped the railroad and workers would resume operations as soon as possible.
Businesses across Canada and the United States said they would quickly face a crisis without rail service because they rely on freight railroads to deliver their raw materials and finished products. Without regular deliveries, many businesses would likely have to cut back on production or even close.
Canadian National trains began running again Friday morning, but the union has threatened to go on strike as early as Monday morning. Saturday’s order ends the strike threat. CPKC workers have been on strike since the lockout began Thursday morning and the railway’s trains are still halted.
“While CN is disappointed that no agreement could be reached at the bargaining table, the company is satisfied that this order effectively ends the unpredictability that had been negatively impacting supply chains for months,” the railroad said in a statement. “CN remains focused on getting freight moving again as safely and efficiently as possible.”
Following Saturday’s decision, CPKC officially ended its lockout and told workers to return to the day shift on Sunday. But union spokesman Christopher Monette said workers on strike would not return to CPKC before the Monday deadline in the order.
CPKC said it wants to “get the Canadian economy moving again as quickly as possible and avoid further disruption to supply chains.”
Railroads said a full recovery could take several weeks, after they began gradually shutting down their networks more than a week ago, leaving shipments stranded at customer loading docks and ports across the country.
The previous contract, which expired late last year, will remain in place while the arbitration process continues, and the board has ordered the unions not to disrupt operations during the process.
Talks between CPKC and CN broke down over how workers are scheduled and rules in the contract designed to prevent fatigue. Both railroads had proposed changing the system of paying workers by hours worked rather than by miles traveled.
The railroad said doing so would make it easier to provide predictable leave, but the union objected, saying the changes could erode crucial fatigue protections and jeopardize job security.
Canadian National and CPKC said they offered pay increases in line with other recent rail industry deals. CN said its engineers earn about 150,000 Canadian dollars a year, while its conductors earn 121,000 Canadian dollars. CPKC said its pay is comparable.
CN also had controversy over its attempt to expand its system of temporarily transferring workers to other areas when there were staff shortages. The union did not want CN to have the power to disrupt families, but the railroad said the system was voluntary and already in place in some locations.
At the same time as Canadian railroads struggle to reach agreements with their unions, major U.S. railroads have struck a number of deals in recent days.
CSX announced the first deals on Wednesday — months before the current contract expires and before the start of the traditional national bargaining process that typically lasts years — then announced seven more contracts on Friday. In all, the new contracts cover more than half of the railroad’s workforce. Norfolk Southern and BNSF made similar announcements, announcing four deals each on Friday with some of their 13 unions.
The deals would help the U.S. rail industry avoid the kind of bitter labor dispute that pushed it to the brink of a strike two years ago before Congress and President Joe Biden implemented the contracts.