A rail strike in Canada would have far-reaching consequences not only for Canada but for all its trading partners, including the largest one: the United States.
Canada’s railways transport around $277 billion worth of goods annually. Three-quarters of all exports are moved into the U.S. via CN and CPKC rail connecting pivotal U.S. hubs Chicago, New Orleans, Minneapolis and Memphis, Tennessee. CPKC’s expansive network also connects with the ports on both the east and west coasts of Mexico.
American Shipper asked officials for both CN and CPKC for an update on their expectations ahead of negotiations with Teamsters Canada on Friday.
FreightWaves: How far apart are the talks? Should the logistics industry brace for a strike?
CN: We received a letter from the Canadian Minister of Labour and wile we are disappointed the Minister is choosing not use section 107 of the Canada Labour Code at this time, we hope TCRC will listen to the Minister’s strong message that they must get serious and engage meaningfully at the negotiating table. The Minister must reconsider his decision if they don’t.
While CN is willing to keep negotiating with the TCRC [Teamsters Canada Rail Conference], the company has lost faith in the process and is concerned that a negotiated deal is no longer possible without a willing partner.
Therefore, the company formally requested the minister of labour’s intervention. In January, CN offered the TCRC a modernized agreement that protected safety and acquired rights while improving work/life balance, which was refused. The offer was then improved in April with a focus on better wages, job security and guaranteed earnings for employees. The TCRC refused the improved offer.
In May, CN then presented a simplified offer within the framework of the existing agreement, which the TCRC also refused. In the absence of a path forward, CN offered to submit to binding arbitration in June. Binding arbitration is a process where both parties empower a mutually agreed upon independent arbitrator to determine the terms of a settlement. It is an impartial approach that would achieve a resolution while avoiding a costly disruption to supply chains, Canadians and the Canadian economy. The TCRC refused this offer.
The union has yet to counter any of our offers detailing proposed wages, rest and labor availability.
On Friday, following the CIRB [Canada Industrial Relations Board] ruling, we formally asked the Canadian minister of labour to use the powers given to him under Section 107 of the Canada Labour Code to refer this matter to binding arbitration.
Unless there is meaningful progress at the negotiating table or arbitration, CN will have no choice but to initiate further embargoes and ultimately lockout employees as of 00:01 ET on Aug. 22.
CPKC: CPKC said it will issue notice to the TCRC – Train and Engine (T&E) division and TCRC – Rail Traffic Controller (RCTC) division of its plan to lock out employees at 00:01 ET on Aug. 22 if union leadership and the company are unable to come to a negotiated settlement or agree to binding interest arbitration.
CPKC is committed to continuing good faith negotiation throughout.
Since September 2023, CPKC has been negotiating in good faith with the TCRC – T&E and TCRC – RCTC. Throughout, CPKC has been committed to responding to our employees’ desire for higher pay and improved work-life balance, while respecting the best interests of all our railroaders, their families, our customers and the North American economy. CPKC offered two options for renewed contracts that provide benefits for all:
- The first delivers significant pay increases and improved work-life balance with scheduled, predictable days off through a dramatically simplified system. The offer presents a progressive, modern, time-based pay model that delivers improved benefits for employees.
- With the exception of our proposal amending the held-away-from-home provision for train crews, the second option offers competitive wage increases that are consistent with recent settlements and maintains the status quo for work rules within the new Transport Canada regulatory framework for rest.
For the TCRC – RCTC division, CPKC has also proposed a renewed agreement with the rail traffic controllers, which would deliver competitive wage increases.
In response to opposition from TCRC leadership, CPKC said Friday that it has advised the union representing conductors and locomotive engineers that it will conditionally withdraw the offer for a new modernized, time-based collective agreement. That time-based agreement proposal was intended to address the union’s concerns related to work and time off scheduling, while allowing significant wage increases and additional customer service flexibilities.
CPKC will focus on a status quo-style contract renewal covering three years with competitive wage increases that are consistent with recent settlements with other railway unions and maintains the status quo for all work rules. The status quo-style offer fully complies with new regulatory requirements for rest and does not in any way compromise safety. Nothing CPKC has put forward creates any risk to safety or employee well-being. To say otherwise is patently false.
FreightWaves: Logistics managers around North America are shocked at the CIRB “essential” ruling and are concerned about the economic impact a rail strike will have. The rails are very important for U.S. trade as well. What is your message to clients as both sides sit down?
CN: A prolonged shutdown of rail operations will have a significant impact on supply chains, creating delays, possible shortages and increasing costs as mines, grain elevators, factories, mills and other industries lose their rail service and must either shut down or find costly, last-minute and temporary alternatives, when possible. Consumers and workers across industries and across Canada will be impacted.
CN did not request this review as the Company and its union already agreed that none of the services the railway provides are “essential” within the meaning of the law. However, we acknowledge that countless industries and communities depend on the railways to feed, heat, protect and shelter Canadians.
CPKC: CPKC is acting to protect Canada’s supply chains, and all those who depend on them, from the more widespread disruption that would be created should a work stoppage occur during the fall peak shipping period. Delaying resolution to this dispute only makes things worse, causing more disruption and damage to Canada’s international reputation as a reliable trading partner. All stakeholders want an end to this needless uncertainty as rapidly as possible so that we can continue serving the North American economy. Stability could be restored today if the TCRC would accept CPKC’s offer to resolve the current labor dispute through binding interest arbitration.
CPKC provided public notice (on embargoes) to mitigate uncertainty and give our customers and supply chains proper time to plan for a safe and orderly shutdown of railway operations. As part of those preparations, CPKC has issued an embargo for all toxic by inhalation (TIH) dangerous goods traffic to allow this traffic to safely exit the rail network prior to a work stoppage. Other embargoes will be issued between now and Aug. 22, as necessary.
CPKC highlighted its strong desire to avoid a work stoppage on our Canadian rail network, which would be damaging to the interests of all stakeholders. We share the federal government’s desire to avoid a damaging work stoppage and restore stability to our supply chains.