The CP rail shutdown has begun: Here’s what you need to know

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This article was published 20/03/2022 (1013 days ago), so information in it may no longer be current.

Canadian Pacific Railway trains are stopped in their tracks and thousands of workers are picketing after labour talks between the company and the union failed Sunday.

The work stoppage is expected to send shockwaves through the farming and manufacturing industries at a time when the supply chain is already being disrupted by the pandemic and Russia’s war on Ukraine. Politicians and industry leaders are pressuring Ottawa to intervene as the House resumes Monday after a two-week break.

Here’s what you need to know:

How did we get here?

On Wednesday, CP Rail served the the Teamsters Canada Rail Conference — the union representing about 3,000 locomotive engineers, conductors, train and yard workers nationwide — with a 72-hour lockout notice in the wake of unsuccessful bargaining over wages, benefits, pensions and work rules.

A lockout is a work stoppage that’s initiated by the employer during a labour dispute, in contrast to a strike, which is when employees refuse to work.

Hours before the midnight deadline Saturday, the union issued a release saying a lockout was being initiated by management at the Calgary-based railway.

But hours later, the company put out a release saying that while the company was still engaged in contract talks facilitated by federal mediators, the union “withdrew its services and issued a news release misrepresenting the status of the talks.” It added that CP was working with its customers to wind down its operations across Canada.

The union then issued a subsequent release which said that in addition to the lockout, Teamsters Canada Rail Conference members were also on strike at CP throughout the country with picketing underway at various Canadian Pacific locations.

What’s the fallout expected to be?

Last week, 45 industry groups warned that any disruption of rail service would hinder Canada’s freight capacity and hurt the broader economy as it grapples with inflation, product shortages, rising fuel costs and the Russian invasion of Ukraine.

“A work stoppage of any length will have a deep and adverse impact for all Canadians who rely on the essential rail supply chain and for the broader Canadian economy,” they said.

The Retail Council of Canada says the timing of potential work stoppage “could not be worse” for their members. As it stands, 89 per cent of small businesses are already experiencing supply-chain challenges with retail, manufacturing and construction being the hardest-hit sectors. About three in 10 businesses are seeing their costs increase by more than 20 per cent due to supply-chain issues.

Fatma Gzara, a supply-chain expert and professor at the University of Waterloo, said consumers could also see price hikes depending on how long the lockout lasts.

Grain is particularly reliant on rail transportation, so consumers could expect increases in the price of bread and flour. The industry is still recovering from a drought last summer which shrunk crop sizes by a third in Canada.

Fertilizer Canada said its members are already two-to-three weeks behind inventories and “Canada cannot afford another disruption to our supply chain.”

“75 per cent of all fertilizer in Canada is moved by rail. During the lead-up to spring seeding, every day, frankly every hour, counts,” President and CEO Karen Proud said in a statement Sunday.

Will the government intervene?

Ottawa is under pressure from premiers and industry leaders to act.

On Thursday, the premiers of Saskatchewan, Alberta and Manitoba called on Prime Minister Justin Trudeau to “take immediate and effective measures” to protect Canada’s supply chain and ensure CP Rail’s network resumes as quickly as possible.

In a statement Sunday, The Canadian Chamber of Commerce’s President and CEO, Perrin Beatty, said “we are calling on the government to do what is best for Canada’s economy by acting now and tabling back to work legislation.”

But federal Labour Minister Seamus O’Regan was optimistic a deal could still be struck at the bargaining table. He tweeted Sunday that talks were ongoing and he expected “the parties to keep working until they reach an agreement.”

With files from the Canadian Press

Lex Harvey is a Toronto-based newsletter producer for the Star and author of the First Up newsletter. Follow her on Twitter: @lexharvs

Omar Mosleh is an Edmonton-based reporter for the Star. Follow him on Twitter: @OmarMosleh