Labour minister rejects CN Rail's call for binding arbitration as lockout looms

Labour Minister Steven MacKinnon has rejected CN Rail's request for binding arbitration in the company's labour dispute with Teamsters Canada Rail Conference (TCRC) — one week before a lockout could shut down the rail network.

"I would like to clarify that it is your shared responsibility — Canadian National Railways Company and the Teamsters Canada Rail Conference — to negotiate in good faith and work diligently towards a new collective agreement," MacKinnon wrote in a letter obtained by CBC News.

The minister added that federal mediators remain available to both parties as negotiations continue. 

"I trust that with continued effort, an agreement can be achieved promptly. The government firmly believes in the collective bargaining process and trusts that mutually beneficial agreements are within reach at the bargaining table," MacKinnon wrote.

When asked for further comment, a representative of MacKinnon's office said the statement in the letter stands. 

In a media statement, CN Rail spokesperson Jonathan Abecassis said the company is "disappointed" in the minister's decision and the company has made four offers since January.

"While we are disappointed the minister is choosing not use section 107 of the Canada Labour Code at this time, we hope TCRC will listen to the minister's strong message that they must get serious and engage meaningfully at the negotiating table. The minister must reconsider his decision if they don't," he wrote.

Under the Canada Labour Code, the minister has the power to send parties in a labour dispute to binding arbitration, which would prevent a work stoppage.

This section was most recently used on June 26 by then-labour minister Seamus O'Regan to order binding arbitration between WestJet mechanics and the airline.

If a settlement is not reached by midnight on Aug. 22, CN Rail maintains it will have "no choice" but to lock out employees. That date is the end of a cooling-off period ordered by the Canada Industrial Relations Board (CIRB) after they ruled rail work is not an essential service under the labour code.

In a media statement, the TCRC said that it agrees with the minister's conclusion that a negotiated settlement is within reach.

"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 TCRC president Paul Boucher. 

Canadian Pacific Kansas City (CPKC), which is in separate negotiations with TCRC, has also signaled its intention to lock out employees if a deal is not reached by Aug. 22. CPKC says it has offered to enter binding arbitration with the union but has not made a request for ministerial intervention.

Both railways have started to shut down parts of their operations in advance of the potential lockouts.

MacKinnon held meetings with all parties on Aug. 5 and urged them to reach negotiated settlements to avoid supply line disruptions. 

On Wednesday, after meeting with TCRC, NDP labour critic Matthew Green sent a letter to MacKinnon calling on the minister to not order binding arbitration.

"Using the section 107 to force them into binding arbitration takes the union's ability to negotiate with all of their tools. It is constitutionally protected that unions have the right to withdraw their labour from management, from corporations, when they're in negotiations," Green told CBC News.

"Corporations consistently drag it out to the last minute and manufacture a crisis."

Alberta Premier Danielle Smith publicly called on MacKinnon to do everything in the government's power to prevent a work stoppage in order to avoid "disastrous" economic impacts.

Saskatchewan Transportation Minister Lori Carr also sent a letter to MacKinnon with a similar request.

Following the CIRB ruling last week, the Business Council of Canada sent a letter to the minister's office, co-signed by nearly 100 business groups and industry associations, urging federal intervention to prevent a supply line shutdown.