The Teamsters Canada Rail Conference, a union representing 4,800 engineers, conductors, and rail traffic controllers, went on strike shortly after midnight May 22 after negotiations with Canadian Pacific Railway (CP) failed to produce a new labor deal. CP and the union, which has been without a contract since the end of December, are at odds over employee pension benefits.
The strike halts CP’s freight services across Canada, although commuter-train services in Vancouver, Toronto, and Montreal will remain in operation after CP and the union agreed ahead of the strike deadline to allow those services to continue.
“As reported, the union has withdrawn its services and, as a result, CP has successfully executed the safe and structured shutdown of its freight train operations in Canada,” said CP Spokesman Ed Greenberg in a May 23 statement. “In addition to customer and supply chain impacts, the suspension of CP’s freight service will also impact many of the connecting railways with whom we do business.”
The strike prompted demands for a quick resolution from the fertilizer, mining, and grain industries, all of whom predicted economic woes if the labor dispute continues. The Canadian Fertilizer Institute (CFI) on May 21 issued a statement urging the Canadian government to act quickly to enact back-to-work legislation, saying ending the strike “is critical to sustaining Canada’s domestic and export markets.”
“Rail service disruptions are damaging to the Canadian economy in general and the Canadian export industry in particular,” said Roger Larson, CFI president. “Even the threat of a strike has serious repercussions on the Canadian economy and on the reputation of our exporters in foreign markets as buyers move to other sources of supply.”
CFI said the Canadian fertilizer industry faces an annual logistical challenge of moving 25 million mt of product, and member companies are currently facing the combination of tight inventories and strong global demand for all fertilizer products.
“The domestic, U.S., and offshore demand for Canadian fertilizer has been very high this spring, and this trend is expected to continue,” CFI said. “Our members currently have large unit trains of potash scheduled to move from western Canada to Vancouver for export offshore, as well as various fertilizer products scheduled to move domestically and cross-border to the important U.S. market. CFI members simply cannot afford the repercussions of a rail disruption.”
Potash shipments for Canpotex, the export marketing arm for Canadian producers PotashCorp of Saskatchewan Inc., Agrium Inc., and The Mosaic Company, are handled by CP and its larger rival, Canadian National Railway (CN). “CP certainly is an important partner of the potash industries,” said Bill Johnson, senior director of public affairs at PotashCorp. Johnson said the industry has “an interest in seeing this dispute resolved quite quickly.”
“The perception of Canpotex from the customer side of things is a reliable supplier,” added Agrium Spokesman Richard Downey.”That’s one of the key benefits of Canpotex, and anything that damages that is of major concern for all of us.”
In a statement on May 23, Canadian Labor Minister Lisa Raitt said the government is “concerned about the national economic significance this will have, and we are prepared to act in the interest of the national economy.” Raitt said she is prepared to introduce back-to-work legislation as early as May 28 if no deal between CP and the union has been reached.
Larson added that “once this issue is resolved, the government must look at long-term action to prevent labor disputes in services that are essential to the long-term economic health of our country