Work stoppage hits Canada’s 2 main freight railways amid fears of economic fallout

By Barry Ellsworth

TRENTON, Canada (AA) - Canada’s two major railways came to a screeching halt early Thursday after the companies locked out nearly 10,000 employees amid fears of economic blowback that could ripple throughout North America.

The work stoppage occurred at 12:01 a.m. local time after the Canadian Pacific Kansas City (CPKC) Railway and the Canadian National Railway (CNR) could not reach an agreement with the Rail Traffic Controller (Teamsters) union and the Rail Traffic Controller division.

Both sides blamed the other as economists feared a rail shutdown would cause major damage to the Canadian and wider North American economies.

“Throughout nearly a year of negotiations, CPKC has remained committed to doing its part to avoid this work stoppage,” CPKC said in a statement. “The TCRC (Teamsters Canada Rail Conference) leadership continues to make unrealistic demands that would fundamentally impair the railway’s ability to serve our customers with a reliable and cost-competitive transportation service.”

The Teamsters union told a different story and said the two sides remained far apart in demands that included improvements to worker safety and the companies' insistence on relocating employees anywhere in Canada.

“Despite months of good faith negotiations on the part of the Teamsters Canada Rail Conference, parties remain far apart, and both CN and CPKC began their lockout ... today,” the union said in a statement.

“The main obstacles to reaching an agreement remain the companies’ demands, not union proposals,” the union said. “Neither CN nor CPKC has relented on their push to weaken protections around rest periods and scheduling, increasing the risk of fatigue-related safety issues. CN also continues to demand a forced relocation scheme.”

In a blog post, Canada’s Logistics Association said the shutdown will be “dire” for the economy.

The majority of Canadian freight is transported by CN and CPKC. In addition, passenger rail service is being disrupted in Quebec, Ontario and British Columbia because CPKC owns some commuter lines.

Outside of Canada, fears are mounting over the economic disruptions that could sweep through North America, whose three nations -- the US, Canada and Mexico -- share a free trade pact.

The decades-long deal has greatly facilitated the interconnectedness of the nations' economies with industries commonly relying on their counterparts in the other countries.

“North American manufacturing supply chains depend on functioning rail links. If rail traffic grinds to a halt, businesses and families across the country will feel the impact. Manufacturing workers, their communities and consumers of all sorts of products will be left reeling from supply chain disruptions," National Association of Manufacturers President and CEO Jay Timmons said in a statement.

"Policymakers in the U.S. and Canada must recognize that the stability and reliability of critical supply chains—which directly affects our quality of life—depends on efficient movement of goods across the border," added Timmons.