Workers Return to Canadian National Railway

By David Ljunggren and Promit Mukherjee

OTTAWA (Reuters) – Workers at Canadian National Railway (TSX:CNR) will begin returning to work on Friday, as announced by the Teamsters union, following the Canadian government’s move to end an unprecedented rail stoppage.

The union noted that the work stoppage at Canadian Pacific (NYSE:CP) Kansas City will continue pending an order from the Canadian Industrial Relations Board (CIRB). Officials from both the union and the company are scheduled to meet with the board on Friday morning.

Canada’s top two railroads, Canadian National Railway and Canadian Pacific Kansas City, had previously locked out over 9,000 unionized workers, sparking a simultaneous rail stoppage that business groups warned could result in hundreds of millions of dollars in economic losses.

On Thursday, the Canadian government announced plans to request the industrial relations board to issue a back-to-work order, which is expected to be issued soon.

The CIRB, an independent body, will consult the companies and unions before finalizing the order. CN had stated it would end its lockout by Thursday at 6 p.m. ET (2200 GMT), while CPKC indicated it was preparing to resume operations in Canada, with timing details pending the CIRB’s order.

Labour Minister Steven MacKinnon expressed optimism, stating, “I assume that the trains will be running within days.”

In addition to the back-to-work order, MacKinnon requested the board to initiate binding arbitration between the Teamsters union and companies, extending the current labor agreements until new contracts are established.

Both sides attributed the stoppage to failed negotiations after multiple discussions.

On Friday, the Teamsters union announced via social media that it had removed picket lines at CN. CN spokesperson Jonathan Abecassis informed the Canadian Broadcasting Corp that it may take over a week to catch up on shipments.

MacKinnon’s decision marks a shift for Prime Minister Justin Trudeau’s Liberal government, which previously preferred a negotiated resolution. “We gave negotiations every possible opportunity to succeed … but we have an impasse here,” MacKinnon commented.

Reliance on Rail
Business groups and companies were urging the government to take action. Trudeau stated, “Collective bargaining is always the best way forward,” but acknowledged the government’s duty to act when supply chains face severe consequences.

As one of the largest countries by area, Canada heavily relies on railways for transporting various commodities and industrial goods. Its economy is closely tied to that of the United States, thus any stoppage could disrupt North American supply chains.

The Canadian Manufacturers & Exporters, an industry group, expressed satisfaction over the government’s intervention, stating that a prolonged stoppage would greatly harm Canadian businesses.

Rail companies cited necessity for the lockouts to prevent unexpected strikes, claiming they negotiated in good faith and offered improved pay and working conditions. Paul Boucher, head of the Teamsters rail union, accused CN and CPKC of compromising rail safety and harming families for profit.

Typically, unions oppose arbitration, as it diminishes their leverage in bargaining for better terms. The left-leaning New Democratic Party, which traditionally supports unions and supports Trudeau’s government, criticized the decision. Party leader Jagmeet Singh said, “Justin Trudeau has just sent a message to CN, CPKC and all big corporations – being a bad boss pays off.”

The stoppage has severely impacted shipments of grain, potash, and coal, while also disrupting the transport of fuel, chemicals, and automobiles. Thousands relying on commuter rail lines to Toronto, Vancouver, and Montreal were affected, as all CPKC-owned train operations were halted indefinitely.

The root causes of the stoppage included scheduling, labor availability, and demands for enhanced work-life balance, according to both the union and the companies. This situation followed Ottawa’s introduction of new duty and rest-period rules earlier this year.