11/25/2019 14:48 EST | Updated 11/25/2019 16:50 EST

CN Rail Strike Takes Its Toll On Grain Exporters, Fertilizer Producers

Farmers and industry workers are urging the federal government to force the strike to an end.

OTTAWA/MONTREAL (Reuters) — The prolonged strike at Canada’s largest railroad, Canadian National Railway Co. took a bigger toll on the economy on Monday, forcing a fertilizer company to plan production cutbacks while grain exporters warned buyers they cannot fulfill sales terms.

At least 35 vessels are waiting at Canada’s West Coast to load grain shipments. An association of Canadian exporters has declared event of delay, allowing members to avoid contract penalties due to circumstances outside their control.

As the strike by some 3,200 unionized employees entered its seventh day, labor union Teamsters Canada said it was no closer to an agreement than it was at the beginning of what has become Canada’s biggest rail strike in a decade.

Striking conductors and yard workers are demanding improved working conditions, including worker rest breaks. The federal government has sidestepped calls by industry and farmers to force rail employees back to work, insisting collective bargaining will solve the dispute more quickly.

Christinne Muschi / Reuters
Farmers dump bags of corn grain in front of the office of Justin Trudeau, as they protest the lack of propane due to the CN Rail strike in Montreal on Nov. 25, 2019. 

Hundreds of farmers protested in Quebec, demanding that the government take more action. Nutrien Ltd said it was preparing to shut down its largest potash mine, at Rocanville, Saskatchewan, for two weeks effective Dec. 2 because of the strike.

Mark Hemmes, president of Quorum Corp which monitors the movement of prairie grain for the Canadian government, told Reuters there were 25 ships parked in the Port of Vancouver and 10 anchored at the Port of Prince Rupert, in northern British Columbia.

Shipments from those ports supply international markets, including Asia.

Canada relies on CN and Canadian Pacific Railway to move products like crops, oil, potash, coal and other manufactured goods to ports and the United States.

Industry figures show that about half of Canada’s exports move by rail, and economists have estimated a prolonged strike could further slow already lackluster growth while costing the economy billions of dollars.

Christinne Muschi / Reuters
Farmers  protest in front of the Papineau riding office Justin Trudeau in Montreal, on Nov. 25, 2019. 

A CN spokesman said company officials continue to negotiate and called for binding arbitration, a demand the union has rejected thus far.

A spokeswoman for Canadian Labor Minister Filomena Tassi declined comment.

The strike, Hemmes said, is hurting shippers who are captive to CN lines as well as exporters who rely on CP, because many of the grain handling facilities at major ports are serviced only by CN.

The north shore of Port of Vancouver’s Burrard Inlet is home to a major potash and coal export terminal as well as grain terminals operated by Cargill and Richardson International that are normally serviced only by CN. A “trickle of cars” from CP was reaching the grain terminals, but they are “for all intents and purposes shut down,” said Wade Sobkowich, executive director of the Western Grain Elevator Association.

In a statement, Cargill Ltd. spokeswoman Connie Tamoto said the company had taken “mitigation measures” to ensure customer needs are met.

Richardson International did not respond to requests for comment.

Christinne Muschi / Reuters
Farmers in tractors with a sign stating "without propane we are all derailed" to protest the lack of propane due to the CN Rail strike in Montreal on Nov. 25, 2019.

Around 300 farmers, angry at a shortage of propane they need to dry grain, gathered with a dozen tractors near the prime minister’s parliamentary office in Montreal on Monday to demand the government do more to end the strike. Some farmers held bags of grain and signs that read “Propane - it’s not just for barbecues” and “To dry grain, you need propane.”

CN is a key link in transporting propane to parts of Eastern Canada where it is also used to heat homes and hospitals.

“Producers are increasingly distressed ... they are a bit exasperated by the government’s lack of sensitivity so far,” said Patrice Juneau of Quebec’s Union of Agricultural Producers.

The auto industry is also affected.

The Unifor union said on Monday that 70 employees at the CN Autoport facility in Halifax, Nova Scotia, which handles vehicles shipped in and out of Canada, would be laid off effective Thursday.