Federal government imposes binding arbitration to end railway labour dispute
Labour Minister Steve MacKinnon says workers, farmers and businesses will continue to rely on rail service
The federal government has stepped in to impose binding arbitration to put an end to a labour dispute between Canada's two biggest railways and the Teamsters union, which represents their engineers, conductors and yard workers.
Labour Minister Steve MacKinnon announced Thursday afternoon that he's directed the Canada Industrial Relations Board to settle the collective bargaining agreements between the railways and the union through binding arbitration. He is also extending the term on their current agreements until new agreements have been signed.
"Workers, farmers, commuters and businesses rely on Canada's railways every day, and will continue to do so. It is the government's duty and responsibility to ensure industrial peace in this critically vital sector," he said in a news release.
For the first time in Canada's history, freight traffic on both of the country's largest railways ground to a halt on Thursday.
After months of bitter negotiations, Canadian National and Canadian Pacific Kansas City locked out 9,300 engineers, conductors and yard workers after the parties failed to agree on a new contract before a midnight deadline.
The two companies move roughly $1 billion worth of goods per day, the Railway Association of Canada says.
Section 107 of the Canada Labour Code allows the government to refer a labour dispute to the Canada Industrial Relations Board (CIRB) to find a solution.
"Canadians can be assured that their government will not allow them to suffer when parties do not fulfill their responsibility, especially where their livelihoods, worker safety and communities are at stake," MacKinnon said.
Canadian Manufacturers and Exporters applauded the federal government's decision to intervene.
"A prolonged stoppage would have imposed enormous costs on Canadian business and workers," president and CEO Dennis Darby said in a news release.
"The wind-down of rail services over the last several days, culminating in the full stoppage this morning, has inflicted significant supply chain and operational challenges for manufacturers across the country — issues that will take days if not weeks to resolve."
The biggest impact in Manitoba of a railway stoppage is felt in the south, Barry Prentice, professor of supply chain management at the University of Manitoba, told CBC Manitoba Information Radio host Marcy Markusa on Thursday morning.
"About one-quarter of all their freight is grain and fertilizer, so those two are going to be affected quite substantially," he said.
Intermodal containers make up about another quarter or so of what moves, he said. Rail intermodal refers to shipping containers moved on rail flatbeds, then shifted to semi-trailer trucks to be transported on roads.
Those containers carry various goods, including retail products and industrial items.
"So there's a big impact on those two right away," Prentice said, referring to the container and agriculture supplies.
As for the northern Manitoba rail lines, they're more immune to what is happening across the south, Prentice said.
"The Hudson Bay Railway is not going to be on strike, and they do depend on things going up to Churchill, but it's a pretty small part of the total scheme of things," he said.
The average person is also unlikely to feel any immediate shock, though supply-chain issues could be felt in a short time, Prentice said.
"What the railways moves is basically raw materials and bulk products, so I don't think there's going to be too much impact per se on the cost of food," he said.
"Now, obviously if the railway rates go up, that could affect certain things that are being moved, but it'll take a long time for that to move its way through the marketplace."
The longer the railways remain out of service, though, the longer it takes to get them rolling again, Prentice said.
"You can't just turn the railway on and off on the dime. For every day lost, they claim it takes at least a week for the railway to catch up," he said.
"So depending how long this lasts, it could be a couple of months … [to clear] the congestion in the rail system."
Manitoba Premier Wab Kinew called agriculture the backbone of the provincial economy and said his government had talked to its federal counterpart to express concerns about the stoppage.
"This is really bad for our provincial economy, and it's irresponsible of these two companies to be locking out their employees," he told Markusa on Thursday.
"For the folks in the middle of harvest season, heading deeper into harvest season, it's a big concern about getting ag product to market, but it's also going to have an impact on input costs and just the overall uncertainty.
"We need the federal government to bring this situation to an end."
Kinew spoke to Markusa before the news broke that the federal government was imposing binding arbitration.
"I know there's been some conversation around binding arbitration, but I don't know if that's the right fit in this situation, because you have a lot of detailed health and safety sort of considerations. Bringing in an arbitrator at the 11th hour might not be the best resolution," Kinew said in the morning.
Prentice said the government would have to do something — "pull Parliament together and pass legislation and force the system back into action" — within seven to 10 days if the impasse wasn't resolved.
"It just is simply too great an impact on the economy to just ignore this and try to hope that the workers and the railways will work [and] find a solution," he said Thursday morning.
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