The Canadian government has stepped in to end a shutdown of freight rail services that was causing concern about supply chain disruptions in North America. Labour Minister Steve MacKinnon has requested arbitration between Canada’s two major railroads, Canadian National Railway (CN) and Canadian Pacific Kansas City (CPKC), and their labour union to resolve a contract dispute. MacKinnon stated that freight rail operations could resume “within days” following this intervention.
CN and CPKC had locked out over 9,000 unionized employees after failing to reach a contract agreement with the Teamsters Canada Rail Conference union. Following MacKinnon’s announcement, the railroads have agreed to resume services, although no specific timeline has been provided.
The union, however, expressed disappointment with the government’s decision to intervene, bypassing collective bargaining. Teamsters Canada Rail Conference President Paul Boucher called it a “shameful decision” and criticized the government for not supporting a negotiated resolution.
The 17-hour shutdown of freight services had disrupted not only supply chains but also thousands of commuters in major cities like Toronto, Montreal, and Vancouver. This disruption had the potential to cause significant harm to the Canadian economy, as about half of Canadian exports are transported by rail. The Railway Association of Canada estimated that freight services carried goods worth 380 billion Canadian dollars in 2022, and an economic group estimated potential losses of $1 billion in the event of a weeklong shutdown.
Overall, the government’s intervention aims to prevent further disruptions to the economy and ensure the stability of the rail services critical to Canada’s trading activities.
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