Nothing good will come out of a complete shutdown by Canada’s two prime rail carriers, say business and industry groups,
The shouting and handwringing by industrial players and business associations is escalating over the lockout of workers by CN and CPKC with the Aug. 22 negotiating deadline now passed with Teamsters Canada Rail Conference.
The simultaneous halt in service by Canada’s two Class 1 railways is “catastrophic” news to the Mining Association of Canada (MAC) that goes beyond the inability of its member companies to ship mineral products to customers, but it damages Canada’s reputation as a supplier of critical minerals and metals to the world.
“As the single largest industrial customer group of Canada's railways, the mining sector has seen first-hand how detrimental unpredictable work stoppages are to Canada's reputation as a reliable trading partner," said MAC president Pierre Gratton in a statement.
"The urgent need for Canadian minerals and metals presents a generational opportunity, and we are in a race with our competitors to meet global demand. A first-ever, simultaneous halt in Canadian Pacific Kansas City Railway Company (CPKC) and Canadian National Railway Company (CN) rail service could not come at a worse time."
The association points out that crude and processed minerals make up more than half of the the total freight volume that’s transported by rail in Canada. The mining industry is a “significant customer” on Canada’s rail network. Work stoppages only add to operational costs and “reduce confidence in Canada as a destination for investment” in the supply chain, added Gratton.
Less than a day into the shutdown, the 97,000-member Canadian Federation of Independent Business (CFIB) is calling on Ottawa to intervene.
“We're calling on the federal government to intervene immediately by introducing binding arbitration or enacting back-to-work legislation,” said CFIB president Dan Kelly in a statement. “Longer term, Canada needs a better way of addressing labour disputes for critical supply chain industry players.”
Kelly said his office is already hearing from businesses concerned about delays to shipments of aviation gas for fighting forest fires, materials for manufacturing, vehicle parts, retail products and agricultural equipment. Trucking capacity is strained and shipment of goods are “stuck in the system.”
That translates, he said, to fewer items on the shelf for consumers, including grocery and drugstore essentials, such as baby formula. Some business owners are telling CFIB they may have to halt operations since they can’t meet contractual obligations to customers.
Echoing Kelly’s thoughts is Daniel Tisch, president-CEO of the Ontario Chamber of Commerce.
“Ontario and Canada’s reliance on our railway systems cannot be understated. As rail is the primary means of transporting $380 billion worth of goods every year, this stoppage will jeopardize critical food, automotive and construction materials supply chains, costing the economy millions of dollars per day.
“Prolonged action would also result in serious harm at a time when our international trading partners look to Ontario and Canada as a source of critical minerals, energy resources and more,” said Tisch.
He references of Section 107 of the Canada Labour Code, which provides the federal labour minister with the tool to refer the dispute to the Canada Industrial Relations Board and prohibit a strike, lockout or end any stoppage pending a resolution. The federal government can also reconvene Parliament to introduce back-to-work legislation.
“We call on the Government of Canada to intervene immediately, exploring all options at its disposal to limit the impact of this disruption,” said Tisch.
