A rail strike covering more than 80 percent of Canadian track was averted by Government intervention. The two major rail operators, Canadian National Railway and Canadian Pacific-Kansas City had advised the Government that they would impose a lockout that commenced on Thursday 22nd effectively preempting strike action by the railworkers’ union.
The Teamsters Union representing Canadian rail workers had announced that a strike would have commenced on Friday, August 23rd. The official notice of intent was provided to the Government in accordance with labor legislation.
The obvious impasse will require urgent and intensive negotiations and arbitration to avert a future stoppage that will affect all aspects of the Canadian economy. It is estimated that a strike would cost $250 million per day equivalent to four percent of GDP. The Canadian rail system carries freight valued at $1 billion each day. The agricultural sector including livestock would have been seriously affected with a strike extending over a week. Spillover to the U.S. is self-evident since a third of rail freight traffic on Canadian lines crosses our Northern border.
The Federal Labor Minister, Steve MacKinnon, emphasized the deleterious effect on the economy from failure of talks between the union and the rail operators with costs born by all Canadians. Given the insecure tenure of the present Liberal Party Government of Canada, MacKinnon used his powers to force binding arbitration despite the political implications of this action from organized labor.
Issues in contention include wages and benefits but also scheduling which is regarded by the Union as a safety-related more than a convenience factor. Last week faced with an impending strike rail companies refused to receive perishable loads and containers requiring refrigeration. The strike has would have impacted Pacific Northwest and all Canadian ports since unions sympathetic to the Teamsters would not have handled cargo to be loaded for the Canadian rail system.