Canadian PM urges railways and union to settle issues, avert major stoppage

But the chances of a last-minute deal appear to vanish as talks break down and parties call for government intervention

By Reuters

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Striking Teamsters union workers picket Canadian National Railway's headquarters in Montreal, Quebec, Canada, on August 22, 2024. — Reuters

Published: Thu 22 Aug 2024, 8:22 PM

Canadian Prime Minister Justin Trudeau on Wednesday urged the country's two main rail companies and the Teamsters union to settle their differences and avoid a stoppage that could cause billions of dollars worth of economic damage.

But the chances of a last-minute deal appeared to vanish later when Canadian National Railway said talks had broken down and called for the government to intervene.

CN Rail and Canadian Pacific Kansas City say they will lock out their workers early on Thursday unless new deals can be agreed. The two have never shut down at the same time.

Talks between both companies and the union have made little progress, with each side accusing the other of bad faith.

Trudeau told reporters in Quebec that his government was following the matter closely.

"It is in the best interest of both sides to continue doing the hard work at the table to find a negotiated resolution," he said.

"Millions of Canadians, of workers, of farmers, of businesses right across the country, are counting on both sides to do the work and get to a resolution."

Federal Labour Minister Steven MacKinnon met CN executives on Tuesday in Montreal and with CPKC in Calgary on Wednesday.

Canada, the world's second-largest country by territory, relies heavily on rail transport to move a wide range of goods and commodities.

"It would be totally unacceptable for us as a country to sabotage ourselves right now," Finance Minister Chrystia Freeland told reporters in Edmonton, Alberta.

"I am calling with extreme seriousness on the employers and on the union to roll up their sleeves to get a deal done...the country has no patience with dillydallying."

Moody's said shutting down 75 per cent of Canada's freight rail traffic would cost the economy C$341.5 million ($251 million) per day, a rate equal to more than four per cent of the nation's GDP.

In an emailed statement, CN called on the labour minister to intervene. "CN has tried to get a deal but a deal is not possible without a willing partner," it said.

MacKinnon has the power to refer the dispute to binding arbitration but the government said it wants the issue to be settled at the negotiating table.

A group of business associations called for Ottawa to prevent a stoppage.

"The federal government must show leadership and act before our trains — and with them, our economy — grind to a halt," they said in a joint appeal to Trudeau.

The Teamsters say CN and CPKC are seeking concessions that would dilute worker safety, a charge that both companies deny.

Dean Roberts, a director of the Canola Council of Canada, told reporters that failure to reach a deal would mean "we are sleepwalking into a calamity".

Shipping company Maersk is evaluating contingency strategies in Canada, the company said on Thursday after the two main freight rail companies shut down their networks.

The Danish company, one of the world's largest container freight groups, said in an advisory to clients it was still accepting bookings from and to origins and destinations serviced by rail via Canadian ports.

"As we navigate the current situation affecting Canadian rail services, we are actively monitoring the evolving circumstances," it said.

"Our team is communicating with our rail partners and evaluating contingency strategies as the situation develops."