- An ongoing dispute between the Teamsters union and Canada’s largest railway operators, Canadian National Railway (TSX:CNR) and Canadian Pacific Kansas City (TSX:CP), could impact billions of dollars in trade as soon as Thursday
- Key disputes include worker safety measures and employee relocation
- Canadian National Railway has added 1.4 per cent year-over-year and 29.49 per cent since 2019
- Canadian Pacific Kansas City has added 1.89 per cent year-over-year and 73.77 per cent since 2019
An ongoing dispute between the Teamsters union and Canada’s largest railway operators, Canadian National Railway (TSX:CNR) and Canadian Pacific Kansas City (TSX:CP), could impact billions of dollars in trade as soon as Thursday.
The union, representing about 10,000 engineers, conductors and controllers, is opposed to a number of provisions from the operators, including Canadian Pacific’s safety measures related to worker fatigue, and CN Rail’s proposal to relocate workers for multi-month periods during tight labour markets.
The operators and the Teamsters have historically worked out their contracts a year apart, but that changed in 2022 when the Canadian government allowed CN Rail to extend its existing contract by a year, aligning labour negotiations representing the majority of Canada’s freight rail system.
CN Rail issued a notice on Sunday to Teamsters Canada Rail Conference (TCRC)-represented employees that they will be locked out at 12:01 am ET Thursday unless they reach an agreement or binding arbitration.
According to CN Rail’s notice, “despite negotiations over the weekend, no meaningful progress has occurred, and the parties remain very far apart.” This is in spite of what the company describes as its “modernized agreement that improved safety, wages, and work-life balance while protecting acquired rights,” which it submitted in January, and subsequently amended in April and May, only to be rejected in both instances.
CN Rail’s notice follows Canadian Pacific’s lockout notice on Aug. 9, in which the company stated that it is focused on a “status quo-style contract renewal covering three years with competitive wage increases” that “fully complies with new regulatory requirements for rest and does not in any way compromise safety.”
The operators have voluntarily submitted to binding arbitration, a process that obliges all parties to abide by the resolution of an independent arbitrator. The Teamsters have refused this route, preferring to hold their ground.
According to a statement by the TCRC to its members regarding negotiations with Canadian Pacific, the union “believes in the collective bargaining process to reach a voluntary negotiated settlement,” but has issued a notice of its own to withdraw services when the lockout is slated to begin “to protect the TCRC’s statutory and Charter-protected rights to engage in a lawful strike.” The union has yet to formally withdraw its services from CN Rail.
While the standoff may prove to be short lived, should the government institute back-to-work legislation, Labour Minister Steven MacKinnon has been steadfast in his support of voluntary negotiations, rejecting CN Rail’s request for arbitration on Thursday and issuing this supportive tweet on Sunday:
(Source: X)
According to the Railway Association of Canada, more than C$380 billion worth of goods travelled over Canadian railways in 2022.
About CN Rail
CN Rail transports more than 300 million tons of natural resources, manufactured products and finished goods throughout North America every year across its nearly 20,000-mile rail network and related transportation services.
Canadian National Railway (TSX:CNR) is up by 0.11 per cent, trading at C$154.68 per share as of 9:35 am ET. The stock has added 1.4 per cent year-over-year and 29.49 per cent since 2019.
About Canadian Pacific Kansas City
Canadian Pacific Kansas City is the first and only single-line transnational railway linking Canada, the United States and Mexico.
Canadian Pacific Kansas City (TSX:CP) is down by 0.15 per cent trading at C$108 per share as of 9:34 am ET. The stock has added 1.89 per cent year-over-year and 73.77 per cent since 2019.
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(Top photo of CN Rail train in Grimshaw, Alberta: Canadian National Railway and Brian Herd)