Railway shutdown has already impacted Ontario's forestry sector

The shutdown of Canada's two largest railways has already created a "logistical nightmare" for Ontario's forestry sector, according to the president of the Ontario Forest Industries Association.

"Product is not moving to customers and all of this is going to cost our industry millions," said Ian Dunn.

Dunn said Ontario's three pulp and paper mills need chemicals that can only be shipped by rail for safety reasons. And lumber companies ship between 70 and 80 per cent of their products by rail.

While some products can be transported by truck, he said it's not a solution that fully replaces the rail system.

"We're already facing a trucking shortage, even with rail."

The disruption also comes a week after the U.S. nearly doubled its softwood lumber duty on imports from Canada, going up from 8.05 per cent to 14.54 per cent.

Canadian National Railway Co. (CN) and Canadian Pacific Kansas City Ltd. (CPKC) locked out 9,300 engineers, conductors and yard workers on Thursday after the parties failed to agree on a new contract.

The workers are represented by the Teamsters union, which has asked for better wages, benefits and working hours, arguing that many employees are on call 24/7.

Labour minister says federal government is sending rail dispute to binding arbitration

3 months ago

Duration 2:15

Minister of Labour Steven MacKinnon says he has directed the Canada Industrial Relations Board ‘to extend the term of the current collective agreements until new agreements have been signed and for operations on both railways to resume forthwith.’

Binding arbitration 

On Thursday afternoon, the federal government stepped in, with Labour Minister Steve MacKinnon announcing he has sent the dispute to binding arbitration. Once the process begins, he believes workers would return to their jobs in no more than a couple of days.

However, Charla Robinson, president of the Thunder Bay Chamber of Commerce, said it can take several weeks for businesses to recover from even a short rail shutdown.

"You don't stop and start a rail system for a country on a dime," she said.

Peter Xavier, vice-president of mining company Glencore's Sudbury Operations, said the rail network is critical to his company's smelter in the northern Ontario city.

"We have some ability to truck material in and out, but with the volumes and distances, it's really not practical to do to get that full capacity," he said.

"As soon as there's disruption in the rail network, we're immediately curtailing some aspect of our operations."

MacKinnon said he has directed the Canadian Labour Relations Board to settle the outstanding terms of the collective agreements and impose final binding arbitration. 

"I have also directed the board to extend the term of the current collective agreements until new agreements have been signed, and for operations on both railways to resume forthwith."