Canadian National Railway (CN) and Canadian Pacific Kansas City (CPKC) locked out nearly 9,300 workers after failing to reach a deal with the Teamsters union. This disruption is particularly concerning as Canada exports around 75% of its goods to the US primarily via rail.
Negotiations have stalled over issues such as shift scheduling, fatigue provisions, and wages. While talks continued late into the evening on Wednesday, Prime Minister Justin Trudeau urged both sides to find a resolution.
Industry and trade organizations warned that the disruption would have a significant impact on the Canadian economy, damaging its reputation as a trading partner. The US and Canadian chambers of commerce echoed these concerns, highlighting the potential devastation to businesses and families on both sides of the border.
The government has resisted calls for binding arbitration, despite pressure from agriculture trade associations. Meanwhile, the shutdown could have ripple effects throughout North America, as rail networks in the US and Mexico continue to operate.
US Transport Secretary Pete Buttigieg expressed concern about the potential impact on cross-border trade. Rail transportation is vital for Canada’s economy, moving half of its export goods and approximately C$380 billion in goods annually.
Ahead of the full shutdown, both CPKC and CN began pausing certain shipments, including chemicals like ammonia and chlorine. Shipping firm Maersk halted shipments destined for Canada that would require rail transportation.
The Canadian Pork Council warned that the shutdown could jeopardize the welfare of animals due to disruptions in feed supply. Additionally, commuter transit in major Canadian cities like Toronto and Montreal may be affected as some dispatchers will be on strike.
Professor Barry Prentice of the University of Manitoba Transport Institute suggested that the government might pass back-to-work legislation if the parties cannot reach an agreement, as has been done in previous labor disputes.