Ottawa orders railroads to enter arbitration with labour union to avert prolonged disruption to services.
Canada’s government has intervened to end a shutdown of freight rail services that had raised fears of supply-chain chaos across North America.
Labour Minister Steve MacKinnon said on Thursday that freight rail operations could resume “within days” after he asked the Canada Industrial Relations Board to oversee binding arbitration between the country’s two major railroads and their labour union.
“Canada is a trading nation. The government will do everything in its power to preserve the stability and certainty that our railways – and entire economy – are renowned for the world over,” MacKinnon said in a statement.
Canadian National Railway (CN) and Canadian Pacific Kansas City (CPKC) locked out more than 9,000 unionised employees early on Thursday after management failed to agree on a new contract with the Teamsters Canada Rail Conference union before a midnight deadline.
CN and CPKC said they would resume services following MacKinnon’s announcement, without specifying a timeline.
“While CN is satisfied that this labour conflict has ended and that it can get back to its role of powering the economy, the Company is disappointed that a negotiated deal could not be achieved at the bargaining table despite its best efforts,” CN said in a statement.
Paul Boucher, president of Teamsters Canada Rail Conference, said the union was “deeply disappointed” with the “shameful decision” to bypass collective bargaining.
“The government took this unprecedented step, using this seldom utilised section of the labour code, only because they knew their minority could not gather the support needed to pass a legislated resolution to appease the railways,” Boucher said in a statement.
The 17-hour shutdown of freight services, which also disrupted thousands of commuters in Toronto, Montreal and Vancouver, had threatened to inflict serious damage to the Canadian economy and upend supply chains linking Canada, the United States and Mexico.
About half of Canadian exports are transported via rail, with freight services carrying goods worth 380 billion Canadian dollars ($279bn) in 2022, according to the Railway Association of Canada.
Anderson Economic Group had estimated that a weeklong shutdown could inflict economic losses worth $1bn.