It’s not as if the U.S. doesn’t have enough problems of its own. But for one U.S. Senator, the potential for a rail strike across our northern border is causing such concern that he reached out to Canada’s leader, urging him to stop it in its tracks.
On July 17, U.S. Senator Kevin Cramer (R-ND), Ranking Member of the Senate Environment and Public Works (EPW) Subcommittee on Transportation and Infrastructure, sent a letter to Prime Minister of Canada Justin Trudeau, “stressing the need to keep railways open and operational.”
“Railroads play a key operational role in the trade relationship, offering a cost-efficient and reliable means of transportation,” Cramer wrote. “Each year, railroads haul millions of tons of products between North Dakota and Canada. This includes fuels, agricultural commodities, and other goods the residents of our communities rely on daily. Any disruption to the transport of these essential products poses risks to consumers and our economies.”
“Those in the agricultural community are particularly vulnerable to a possible strike,” continued Cramer. “They rely heavily on rail transport during the harvest season. Disruptions to this transportation option would delay the delivery of agricultural goods and a strike could lead to potential food shortages and higher prices for consumers. This concern is exacerbated by the fact there are limited alternative transportation options available to shippers should a disruption occur.”
Negotiation dynamics
On December 31, 2023, the collective agreement between the Teamsters Canada Rail Conference (TCRC) and rail operators Canadian National Railway (CN) and the Canadian Pacific Kansas City (CPKC) expired — thrusting the parties into negotiations.
After five months passed with no deal in sight, the TCRC announced on May 1 that nearly 10,000 workers had voted to authorize strikes at CN and CPKC.
“Unless parties can reach an agreement, a work stoppage can occur as early as May 22, at 00:01,” the announcement said.
“After six months of negotiations with both companies, we are no closer to reaching a settlement than when we first began. Both companies are trying to strip our collective agreements of safety-critical rest provisions. We are at an impasse, with the companies failing to understand that the Teamsters will never compromise on safety or bargain with Canadian lives,” said Paul Boucher, president of the TCRC.
“A simultaneous work stoppage at both CN and CPKC would disrupt supply chains on a scale Canada has likely never experienced. I would like to make it very clear that provoking a crisis on that scale has not been, and never will be, our goal. The reality is that we would very much like to avoid a work stoppage. With these results, we intend to go back to the bargaining table, work with federal mediators, and do everything in our power to reach a fair deal for our members. A deal that does not compromise on safety – or put profits over people,” added Boucher.
All eyes on the CIRB
That move prompted industry groups to call on Canadian labor minister Seamus O’Regan to ask the Canadian Industrial Relations Board (CIRB) to “assess whether the strike would threaten national safety due to the disruption of critical shipments,” according to a July 8 Industry Today post — thus putting strike plans on hold.
“The CIRB is reviewing any ‘maintenance of activities’ agreements between the two sides, as these indicate which services must be maintained by both parties in case of a work stoppage; the TCRC has said no such agreements exist,” according to the post. “Though negotiations can continue, the TCRC cannot strike until at least 72 hours after the CIRB decides on the legality of such an action and determines it would not immediately impact public safety. The Canadian Industrial Relations Board (CIRB) review process is ongoing, with no timeline available as to when it will conclude.”
As a July 9 Brandon Sun article notes, while they were waiting on a decision, rail workers voted once again and “almost unanimously” to reauthorize strike action, since “strike votes in federally regulated industries are valid for only 60 days.”
“CN and CPKC are trying to force changes to our collective agreements that would move the clock back on working conditions and rail safety. The Teamsters are trying to stop them. With this renewed strike mandate, we intend to go back to the bargaining table, work with federal mediators, and do everything in our power to reach a fair deal for our members and protect all Canadians,” said Boucher in a TCRC statement announcing the vote.
According to a July 12 CN update, a CIRB ruling is now expected by August 9.
“The Canadian Industrial Relations Board (CIRB) has provided an update on the timing of their decision regarding the Minister of Labour’s referral about the question of essential services,” the update said. “The CIRB has advised CN that they intend to make that decision by August 9, 2024, and that in the event a decision is not made by August 9, they will provide another update.”
“We recognize that the prolonged negotiations are creating uncertainty, and we are working towards providing as much predictability as possible to our employees, customers and partners,” CN said. “No work stoppage can occur until either party files the required 72-hour notice after the CIRB issues its decision, subject to any extension of the cooling off period that may be ordered by the CIRB. Since the beginning of the negotiations, our goal has always been and continues to be to negotiate in good faith with the TCRC to reach a mutually beneficial agreement that maintains safety and stability for our team, our customers, and North American supply chains.”
Supply chain impacts of a strike
Many supply chain stakeholders are losing sleep over the potential for a strike — especially those in the agriculture sector, as Senator Cramer noted.
“U.S. lawmakers and agricultural shippers are warning that a potential strike by Canadian railroad workers could damage both nations’ economies and have requested that the Canadian government recognize the essential nature of agricultural rail transportation,” the National Feed and Grain Association (NGFA) said in a July 19 post.
After the TCRC’s May vote authorizing a strike, NGFA sent a letter to CIRB saying that “shutdowns or slowdowns of rail-dependent facilities would result in harmful consequences for Canada’s agricultural producers and industry as well as domestic and global food security.”
In the letter, the organization described the immediate impact and ripple effect of a strike — as noted in the following excerpts:
- “Due to the large landmass, Canada is more dependent on rail service than most countries and the loss of rail service would be profound on its most rail dependent industries, such as agriculture.”
- “The NGFA … consists of grain, feed, processing, exporting and other grain-related companies that operate more than 8,000 facilities handling Canadian and U.S. grains and oilseeds. Its membership includes grain elevators; feed and feed ingredient manufacturers; biofuels companies; grain and oilseed processors and millers; exporters; livestock and poultry integrators; and associated firms that provide goods and services to the nation’s grain, feed and processing industry. Many of these firms rely on rail services that transit to and via Canada, which would lead to ripple effects across the entire industry.”
- “The impact of a strike would be particularly severe as trucking is not a viable option for many agricultural shippers due to their high-volume needs and the long distances for many of the movements.”
- “There is a sizable livestock industry that depends on rail to timely deliver corn and other feed grains, dried distillers grains, and further feed ingredients. There also are many facilities, such as biofuels operations, flour mills and other grain processors that require uninterrupted rail service. In the event of an interruption, they quickly run out of storage capacity and incur shortages of incoming raw materials. In addition, shutdowns and restarts of such facilities are complex operations, meaning that even a short-term disruption could stop production for several weeks and cost the Canadian economy.”
- “The impact would go beyond the domestic population, as Canada is the world’s largest exporter of canola and oats, third largest exporter of wheat, and fifth largest for barley. Canada’s agricultural export facilities are primarily served by rail and a stoppage of rail service would materially harm Canada’s farmgate prices for commodities, Canada’s ag shippers and exporters and its global customers.”
In a July 15 statement, the Agricultural Producers Association of Saskatchewan (APAS) concurred.
“As the 2024 harvest season approaches, optimism is overshadowed by the severe risk of a dual strike at Canadian Pacific Kansas City (CPKC) and Canadian National (CN),” the organization said, urgently calling for “immediate action by all parties to preserve the continuity of rail operations, an essential service relied upon by farm families across Canada.”
“The simultaneous expiry of operating crews’ contracts at both Canadian Pacific and Canadian National railways presents an unprecedented challenge to our industry,” warned APAS president Ian Boxall. “Without swift resolution, this standoff threatens not just our province’s agricultural sector heading into harvest season but the economic well-being of our nation. We must act now to ensure our farmers aren’t left bearing the brunt of this looming crisis.”
“With the prospect of a large crop on the horizon, the potential rail service disruption could have critical repercussions, from delayed farmer payments to jeopardizing Canada’s reputation as a reliable global supplier,” Boxall added. “It’s imperative that all parties involved recognize the high stakes and work collectively towards a solution. Our nation’s economic security and the livelihood of our farming communities depend on it.”
