Canadian Railway Workers’ Lockout Begins, Posing Risks to U.S. Supply Chains
The unexpected lockout set for Thursday could severely impact the Canadian economy
On Thursday, Canadian National Railway (CN) and Canadian Pacific Kansas City (CPKC) declared a lockout of their workforce in Canada following unsuccessful labor negotiations, leading to the suspension of their rail services throughout the country.
This action, announced by the Teamsters union which represents nearly 10,000 employees at these companies, sets the stage for an extraordinary rail shutdown that could significantly harm the Canadian economy and disrupt trade across the U.S.-Canada border.
Being the second-largest nation in the world by land area, Canada heavily depends on its rail systems. This lockout is expected to disrupt shipments of essential commodities such as grain, potash, and coal while also impacting the transportation of oil products, chemicals, and vehicles.
Various industry organizations had pressed Prime Minister Justin Trudeau’s government to intervene and avoid a work stoppage, highlighting that Canadian railways transport goods worth approximately $277 billion annually. According to U.S. railroad Union Pacific, the stoppage could halt the movement of around 2,500 rail cars daily across the border.
The economies of Canada and the U.S. are closely linked. Rail transport constituted 14% of the total bilateral trade, which reached $382.4 billion in the first half of this year, as reported by the U.S. Department of Transportation.
The stoppage follows several months of failed negotiations. Both the union and the railway companies have accused each other of acting in bad faith while negotiating key issues. The union is advocating for enhanced protocols on fatigue management, rest periods, and scheduling, emphasizing worker safety.
CN has indicated it provided improved wage offers and a proposal to reduce the number of working days per month, but claimed the union did not engage with this offer. CPKC stated that a mutually agreeable solution with the Teamsters Canada Rail Conference was not attainable.
The companies asserted that they made their final proposals to the Teamsters to prevent the work stoppage and encouraged the union to continue discussions.
