Canadian National Railway, one of Canada’s two largest railroads, formally notified the Canadian Teamsters union on Sunday that it would begin locking out its members early Thursday morning.
“Unless the labor dispute is resolved immediately and definitively, CN will have no choice but to continue with phased and progressive network closures, which will ultimately culminate in a lockout,” the company said in a statement.
“Despite a weekend of negotiations, no meaningful progress has been made and the gap between the parties remains large.”
Canada’s other major railroad, Canadian Pacific Kansas City, has already told the Teamsters union that it will begin locking out its members early Thursday morning, meaning most freight rail traffic in Canada will be halted by Thursday unless a last-minute collective bargaining agreement is reached between the two companies and Teamsters chapters.
Separately, the Teamsters also served a 72-hour strike notice on CPKC late Sunday.
“Unless the parties involved can reach an agreement at the last minute, work will stop at 12:01 a.m. on Thursday, August 22,” it said in a statement.
Both companies and the union have accused each other of bad faith in negotiations, with drivers saying CN Rail and CPKC are seeking concessions that could put worker safety at risk – charges both companies deny.
CPKC and Canadian National Railway have suspended freight services in preparation for a possible strike by a combined 9,300 workers on both railways.
Why are they both trying to stop it?
Contract negotiations between the Teamsters union and companies typically take place on a yearly basis, but after new federal fatigue rules were implemented in 2022, CN requested a one-year extension of its existing contract rather than negotiating a new one.
This means that the companies’ collective bargaining agreement expires at the end of 2023, with negotiations continuing beyond that. As a result, for the first time, a failed negotiation would shut down a large part of Canada’s freight rail system.
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What happens next?
CPKC, which will be formed in 2023 from the merger of Canadian Pacific Railway and Kansas City Southern Railway, owns rail networks in the U.S. and Mexico and said it would operate them as normal. CN also said it would operate trains on its U.S. network.
Still, the strike would disrupt shipping south of the border, where rail operators and some of their U.S. competitors have begun refusing certain cross-border shipments that rely on the CN and CPKC networks.
Railroads transport cargo such as grain, cars, coal, and potash.
What are they arguing over?
The union says CPKC wants to “remove all safety-critical fatigue provisions from the collective agreement”, which would mean crew members would be forced to stay awake for longer periods of time, increasing the risk of accidents.
CPKC said its proposal maintains the status quo on all work regulations and is “fully compliant with new regulatory requirements regarding rest periods without compromising safety.”
The Teamsters say CN wants to implement a forced relocation clause that would order workers to move across Canada for several months to fill labour shortages.
CN says it has made four proposals this year regarding wages, rest and labour provision, while fully complying with government regulations on working hours and rest periods.
What can the federal government do?
Under section 107 of the federal Labour Act, Labour Minister Stephen MacKinnon has broad powers to order the parties into binding arbitration. His predecessor, Minister Seamus O’Regan, issued a similar order in 2023 to end a dockworkers strike in British Columbia. In that case, unlike the current rail dispute, the parties had largely agreed on the outlines of a settlement.
McKinnon last week rejected CN’s request for binding arbitration, instead calling for the two sides to work harder at the negotiating table.
The current Liberal government has shown little interest in such moves in past disputes and would prefer that both sides focus on negotiations. Complicating matters, Prime Minister Justin Trudeau’s government is held in power by the left-leaning New Democratic Party, which has traditionally had the support of powerful labor unions.
