BUSINESS
11/26/2019 09:51 EST | Updated 11/26/2019 16:54 EST

CN Rail Strike To End With Tentative Deal, Teamsters Say

The week-long strike over work conditions took a toll on the economy.

Mark Blinch / Reuters
Teamsters Canada union workers picket at the CN Rail Brampton Intermodal Terminal after both parties failed to resolve contract issues, in Brampton, Ont., Nov. 19, 2019.

MONTREAL ― An end to a nationwide rail strike that has gripped the country for eight days is within sight, but concerns over the economic fallout still linger.

Canadian National Railway Co. and Teamsters Canada reached a tentative deal Tuesday to renew a collective agreement for more than 3,000 workers, ending a strike that halted shipments, triggered layoffs and disrupted industries across the country.

Normal operations at CN will resume Wednesday at 6 a.m. local time across Canada, the union said.

Details of the settlement agreement, which must be ratified by union members, were not immediately available. Ratification is expected within eight weeks.

Earlier: Feds resist calls to legislate an end to CN Rail strike. Story continues below.

 The federal government had faced mounting pressure to resolve the strike _ either through swift mediation, binding arbitration or back-to-work legislation _ as premiers and industry voiced concerns about lost profits and a critical propane shortage in Quebec.

However the government said it believed that the quickest way to end the dispute would be a negotiated settlement hammered out at the bargaining table.

About 3,200 CN conductors, trainpersons and yard workers across the country, who have been without a contract since July 23, walked off on Nov. 19 over worries about long hours, fatigue and what they consider dangerous working conditions.

Labour Minister Filomena Tassi and Transport Minister Marc Garneau congratulated the two sides for staying at the bargaining table and reaching a settlement.

“Had we taken an approach like the previous government in deciding to legislate back to work, we would not have had a solution today,” Garneau told reporters in Ottawa.

 

In 2012 federal legislation ended a nine-day strike at Canadian Pacific Railway Ltd.

Tuesday’s deal came a day after Nutrien Ltd. announced that it would temporarily shut down its largest potash mine, laying off 550 employees in southeastern Saskatchewan for two weeks starting Dec. 2 as a result of the strike. The fertilizer giant said Tuesday the layoffs will go ahead despite the deal.

“In terms of the backlog that was created with the supply chain due to the strike over the past week, it’ll take some time to recover,” Nutrien spokesman Jeff Holzman said.

The strike, had it continued through the end of the week, could have cost the Canadian economy between $1.6 billion and $2.2 billion, according to TD senior economist Brian DePratto.

The Mining Association of Canada said the impacts “will continue to be felt for the foreseeable future,” as each day of disrupted service requires about a week to move the backlog — meaning roughly two months of surplus shipments.

Christinne Muschi / Reuters
Farmers carrying corn grain protest in front of the Papineau riding office of Canadian Prime Minister Justin Trudeau, the lack of propane due to the Canadian National Railway (CN Rail) strike in Montreal, Quebec, Canada November 25, 2019. REUTERS/Christinne Muschi

“We’re talking millions and millions of dollars of foregone economic opportunity here, lost sales,” said Brendan Marshall, the association’s head of economic and northern affairs. Winter weather could further slow shipments of the surplus product, as cold temperatures mean shorter, slower trains.

Marshall joined the Alberta Wheat and Barley Commissions in calling on Ottawa to treat rail freight as an “essential service” — which would bar it from strike action _ due to its fundamental role in the Canadian economy.

“Canada’s longshoremen are already prevented from engaging in strikes that would impact the loading of grain vessels and the commissions believe those same provisions should be extended to rail,” the commissions said in a statement.

Nearly three-dozen bulk freighters are waiting at the Port of Vancouver to load grain, with some set to incur demurrage penalties that are ultimately charged back to farmers, the commissions said.

We’re talking millions and millions of dollars of foregone economic opportunity here, lost sales.Brendan Marshall, the association’s head of economic affairs, Mining Association of Canada

Federal labour legislation defines essential services _ such as prison and border guards — as “necessary for the safety or security of the public,” rather than merely inconvenient or costly if absent.

Premier Francois Legault compared rail transport to an essential service and called for a “mechanism” to avoid another propane shortage down the line. Longer-term solutions lie in “having less propane use and more hydro-electricity use,” he added.

About $300 million worth of Quebec crops still lie in the fields, at risk of being damaged or lost under a blanket of snow, said the provincial grain farmers union. Harvesting operations — which rely on propane to dry grain — came to a standstill after trains carrying the gas to Quebec stopped moving.

Garneau told reporters Tuesday that rail freight is “incredibly important for the economy of this country,” but said it’s “normal” that parties have “disagreements from time to time.”

Making up for losses 

The Agricultural Producers Association of Saskatchewan demanded Garneau ask CN for an immediate update on its winter shipping plans.

“We need to know how CN plans to make up the shipping shortfall,” association president Todd Lewis said in a statement. “This is crunch time for our cash flow and producers need to move grain to get paid.”

Saskatchewan Premier Scott Moe deemed the deal “absolutely a positive — not only for Saskatchewan and our export industries that rely on our rail service, our export transportation, but I think it’s a sigh of relief for the entire nation.”

CN confirmed job cuts earlier this month just before the strike began due to sputtering commodities shipments and trade tensions between the U.S. and China.

The railway cut its profit outlook for 2019 in October, saying a weaker economy had eroded rail demand. The Montreal-based company lowered its expectations for adjusted earnings per share to the high single digits, down from predictions of low double-digit growth.

This report by The Canadian Press was first published Nov. 26, 2019.