CPKC, CN Rail both threaten lockout if labour deal isn't reached by Aug. 22

Both of Canada's national railways are now threatening to lock out employees if their separate labour negotiations with Teamsters Canada aren't resolved by 12:01 a.m. on Aug. 22.

CN Rail is formally calling on the federal government to deploy binding arbitration in the company's dispute with Teamsters Canada. In a media release, CN Rail said it is making the request to "protect Canada's economy."

CN said that if the dispute isn't resolved soon, it will have "no choice" but to begin a phased network shutdown, concluding with a lockout.

Canadian Pacific Kansas City (CPKC) said in a media release it is issuing its lockout notice publicly to give customers and supply chains time to plan for a work stoppage. The rail company adds that it has offered to enter binding arbitration with the Teamsters.

In an email to CBC News, Teamsters Canada public affairs director Christopher Monette called the the threat of a lockout "unexpected and needlessly antagonizing."

"With at least thirteen days of negotiations still ahead, this move represents an unnecessary escalation that goes against the principles of good faith bargaining that CN and CPKC claims to uphold,' Monette said.

The news follows a decision by the Canada Industrial Relations Board (CIRB) that CN Rail and CPKC will not be expected to maintain service in the event of a strike or lockout because rail service is not considered "essential" under the Canada Labour Code.

The roughly 9,300 employees represented by Teamsters Canada at the two railways now have a strike mandate. The CIRB has ordered a 13-day cooling off period for both sides and a strike can't take place now before Aug. 22.

Back in May, then-labour minister Seamus O'Regan asked the CIRB to look into whether service should be maintained during a strike or lockout.

In its ruling, released Friday, the CIRB said that while what constitutes an "essential service" might seem self-evident, the Canada Labour Code's definition is specific.

The CIRB said it had to decide whether an interruption of rail service would result in an immediate, serious threat to public health and safety under the law.

The board concluded that a work stoppage would not present an immediate threat to public safety because previous work stoppages involving the parties presented no such threat, and no party brought forward convincing evidence to the contrary.

"There is no doubt that a work stoppage at CPKC/CN would result in inconvenience, economic hardship and, possibly, as some groups and organizations have suggested, harm to Canada's global reputation as a reliable trading partner," the CIRB decision says.

"While such possible harm is by no means insignificant, these are not factors that are to be considered by the Board when addressing a referral under section 87.4 of the [Canadian Labour Code]."

Posting on the social media platform X, Labour Minister Steven MacKinnon said the parties involved have a responsibility to Canadians.

"I call upon the parties to stay at the bargaining table and continue holding productive and substantive discussions that meet the needs of this moment. A negotiated agreement is the best way forward," he wrote.

MacKinnon met with the parties on Aug. 4. At the end of that meeting, he said the parties had agreed to restart negotiations on Aug. 7, accompanied by federal mediators.

CN Rail said the union has not "engaged meaningfully" since talks resumed.

Before the rail companies announced their lockout intentions, Teamsters Canada indicated it would provide 72 hours' notice of any strike action.

"From the very beginning, rail workers have only ever sought a fair and equitable agreement. Unfortunately, both rail companies are demanding concessions that could tear families apart or jeopardize rail safety. Rail workers have fought for a safer and more humane industry for decades, and we will not accept moving backwards," said Teamsters Canada Rail Conference president Paul Boucher in the statement.

Business groups call on Trudeau to act

The Business Council of Canada released a letter calling for immediate federal intervention to stop a labour disruption on the railways. The letter was co-signed by nearly 100 business groups and industry associations, and is addressed to Prime Minister Justin Trudeau, MacKinnon and Transport Minister Pablo Rodriguez.

"Rail is the backbone of the Canadian economy. Businesses of all sizes and in all sectors rely on rail to deliver goods that are essential for their operations and the employment of millions of Canadians," Business Council of Canada president and CEO Goldy Hyder said in an emailed statement.

"In addition to the overall harm to the economy and jobs, a national work stoppage would also drive up prices for essential goods at a time when Canadians are facing affordability challenges."

In their letter, the Business Council says goods worth $380 billion are shipped on Canada's railways every year.

The Canadian Manufacturers and Exporters (CME), which also signed the Business Council letter, is calling on the House of Commons transport committee to hold an emergency meeting next week to study the impacts of a rail stoppage on the broader economy.

CME says a rail work stoppage would cost manufactures an average of $275,000 daily due to decreased output and increased expenses.