Canadian Pacific Railway strike sparks fears of more supply chain problems

Locked out workers pick up Canadian Pacific Railway headquarters in Calgary on March 20.Jeff McIntosh/The Canadian Press

Canadian companies and industry experts are urging Ottawa to intervene in a nationwide work stoppage at Canadian Pacific Railway CP-T, which threatens food inflation, supply chains and the country’s reputation as a trusted farming partner.

CP Rail trains came to a halt and workers seized the picket lines on Sunday after the two sides failed to reach a deal by midnight. The labor dispute will further exacerbate the economic disruptions caused by the pandemic, the extreme weather in Western Canada and the Russian war against Ukraine.

“This is the one labor dispute that the world absolutely does not need right now,” said Sylvain Charlebois, director of the Agri-food Analytics Lab at Dalhousie University. “The world is short, agriculturally speaking. We need to produce more grain, we need fertilizers, we need a strong logistics network.

“All eyes are on North America to produce more this year because of what is happening in Ukraine, so unfortunately this strike is happening at the worst possible time.”

Industry groups call on Ottawa to end potential CP Rail work stoppages

The Teamsters Canada Rail Conference (TCRC), which represents about 3,000 locomotive engineers, conductors and train and yard workers, had accused the company of initiating a weekend lockout, despite the union’s continued interest in negotiations. In doing so, the company showed irresponsibility in labor relations and the continuity of the Canadian supply chain, according to the union.

However, the employer says he was sitting at the negotiating table in Calgary late Saturday night with federally appointed mediators awaiting a response to his latest offer when the TCRC unilaterally withdrew before the strike or lockout deadline could legally pass.

“This was clearly a failure of the TCRC to negotiate in good faith,” Canadian Pacific spokesman Patrick Waldron said in an interview on Sunday. “These actions show a complete disregard for the unnecessary damage this will cause to the Canadian economy and supply chain.”

A union spokesperson did not respond to questions about the conflicting statements. The two sides will continue talks with a mediator on Sunday.

Labor Secretary Seamus O’Regan said Canadians are counting on a quick solution. When asked whether the minister was willing to introduce legislation on return to work, Mr. O’Regan emailed The Globe and Mail that federal mediators continue to support the parties in negotiations and that “our administration believes that the best agreements are made by the parties at the table.”

Industry groups are pressing the government to act quickly, saying every day of work stoppage has consequences.

Fertilizer Canada, which represents manufacturers and wholesale and retail distributors, said members are already two to three weeks behind schedule due to poor rail service leading into the spring season. The group said the 2021 season saw lower crop yields due to weather conditions and food security depends on maximizing crops to make up for last year. In addition, it said, there is a short time for farmers to fertilize their crops.

“Seventy-five percent of all fertilizer in Canada is shipped by rail,” Karen Proud, president and CEO of Fertilizer Canada, said in a statement released Sunday. “In the run-up to spring sowing, every day counts, frankly every hour. During this critical time, our members rely on uninterrupted rail service to deliver their produce to their farmer customers in Canada and international markets.”

The Canadian Federation of Agriculture (CFA) urged Ottawa to use “every mechanism available” to ensure the dispute is resolved quickly and successfully. The organization said the work stoppage will damage Canada’s ability to act as a reliable source of agricultural products for global consumers and have a more direct impact on livestock feed.

CP Rail trains came to a halt and workers took over the picket lines after the two sides failed to reach a deal.Jeff McIntosh/The Canadian Press

“Disruptions like these could reverberate and have repercussions across the food supply chain, as Canadians have seen in recent years,” the CFA said in a statement released ahead of Sunday’s work stoppage.

dr. Charlebois of the Agri-food Analytics Lab noted that last year’s drought in Western Canada caused a widespread feed shortage for livestock farmers, necessitating the importation of grains from the US by rail.

“If they suddenly lose their confidence on track, they will likely sell all their inventory early to cut costs, so prices could go even higher in the summer and fall. … Railways are really the backbone of our [agricultural] economy.”

The parties have been negotiating since September and continue to disagree on more than two dozen outstanding issues, including wages, pensions and work-life balance. For example, the union is objecting to a clause requiring employees to take their federally mandated breaks at terminals away from home. This would extend the time spent on the road by at least 32 hours, the union says, while the intent of the provision was for the break to take place in a home terminal.

“Our members want respect and a fair contract,” TCRC spokesman Dave Fulton said in a statement.

“They want to work, but they also want to be able to spend time with their families and rest. That is the least CP can do.”

Your time is precious. Have the Top Business Headlines newsletter delivered to your inbox with ease in the morning or evening. Sign up today

Leave a Comment