Canada’s railways are working to resume full service after a labour board imposed binding arbitration and ordered thousands of rail employees back to work, ending a conflict that crippled the country’s supply chains.

Canadian National Railway Co. said it has been restoring its operations since workers returned to their duties on Friday morning, with a company spokesperson noting that it could take longer than a week to return to full service.

Canadian Pacific Kansas City Ltd., meanwhile, had urged its employees to return for the day shift on Sunday, but the Teamsters union said its members at the company would only resume work one minute after midnight on Monday morning, as specified in the Canada Industrial Relations Board order.

Ratings agency Moody’s had estimated the rail stoppage could cost the Canadian economy up to $341-million a day, a rate equal to more than 4 per cent of the country’s gross domestic product.

While the work stoppages at the country’s two major railways were brief, both companies had reduced their operations beforehand, for instance parking trains, removing some of the goods on board and telling customers to stop shipping different types of products.

“One day of stoppage is three to five days of recovery, and we were winding down our network. You can’t shut down a rail network just by hitting a switch,” CN spokesperson Jonathan Abecassis said in an interview Sunday. “It could probably take upwards of a week, maybe a bit more” to get back to normal.

With containers of goods piling up at ports waiting to be loaded onto trains, it will likely take weeks for supply chains to get back on track, according to Dennis Darby, president and chief executive officer of Canadian Manufacturers & Exporters.

“It’s going to be a bit bumpy for, we expect, the next month,” Mr. Darby said, noting that customers could be waiting longer for things such as cars or even certain food products.

Manufacturers are relieved service is resuming, as more than $500,000 of goods a day had been stalled because of the work stoppages, Mr. Darby said. That translates to added costs for manufacturers, who have had to pay penalties to customers and to their suppliers, particularly in the U.S., as contracts often stipulate delivery dates, he noted.

Some manufacturers were able to move some of their goods onto trucks, which also increases costs, Mr. Darby added.

CPKC said in a statement on Saturday that the company expects “it will take several weeks for the railway network to fully recover from this work stoppage and a period of time beyond that for supply chains to stabilize.”

Canada’s rail network shut down at midnight on Wednesday when both CN and CPKC locked out employees after months of separate contract talks failed to yield agreements. CPKC train crews and dispatchers went on strike at the same time.

The labour unrest also affected around 30,000 commuters in Toronto, Vancouver and Montreal, who use trains running on CPKC-owned lines.

Metrolinx, the agency responsible for Ontario’s GO Transit system, said services on the Milton GO line and at Hamilton GO station will start up again on Monday, but added that there may be some schedule changes as normal service is restored.

Metro Vancouver’s transit authority said the West Coast Express commuter service will resume on Monday, although there may be some delays. Greater Montreal’s Exo transit system also said commuter lines will again begin to run on Monday morning.

On Saturday, in response to a directive from Labour Minister Steven MacKinnon, the Canada Industrial Relations Board ordered CN and CPKC to resume rail service, and employees to return to work, effective Monday.

The board extended the terms of the previous collective agreement, which expired in December, pending binding arbitration. A case management meeting is scheduled for Thursday, Aug. 29.

Teamsters Canada Rail Conference, the union representing nearly 10,000 rail workers, said it will comply with the decision but plans to appeal the ruling in federal court.

TCRC president Paul Boucher said in a statement that the decision “sets a dangerous precedent.”

“It signals to corporate Canada that large companies need only stop their operations for a few hours, inflict short-term economic pain, and the federal government will step in to break a union,” Mr. Boucher said.

At a Sunday press conference in Halifax during a Liberal cabinet retreat, Mr. MacKinnon defended his decision to order people back to work, saying it was in the interest of both unionized workers and the economy.

He said the shutdown had significant knock-on effects on jobs in other industries across Canada, like potash mining and auto-manufacturing, which were jeopardized because the trains weren’t moving. He also noted that the shutdown was felt south of the border as well, saying about a third of Canadian rail freight is exported to the United States.

“We were confronted with exceptional circumstances where we made a decision that was in the interest of Canadian workers,” he said.

Alexandra Posadzki
Telecom Reporter
The Globe and Mail, August 25, 2024