The ongoing work stoppage at the Canadian Pacific Railway is fuelling concerns about the potential economic fallout and its effects on an already-strained supply chain amid high inflation.
CP Rail’s Canadian operations shut down on Sunday, after a work stoppage began just before midnight.
Both it and Teamsters Canada Rail Conference, which represents about 3,000 unionized locomotive engineers, conductors, train and yard workers, have been negotiating a new contract since September.
Both CP Rail and Teamsters Canada blame each other for the work stoppage, with the former calling it a strike by the union and the latter calling it a lockout by the employer.
With no resolution found, workers hit the picket lines across Western Canada, including Port Coquitlam, B.C., Calgary and Regina.
With recent natural disasters and a war in Ukraine leaving many still worried about the delivery of goods in Canada, some including business and political leaders are calling on the federal government to pass legislation that would force CP Rail’s unionized employees back to work.
"Well, like anybody, you just hope that both the union and management will actually agree on something," Dalhousie University professor of food distribution and policy Sylvain Charlebois told CTV’s Your Morning on Monday.
"Obviously, you don’t want a government to intervene, but if it’s needed, absolutely, I think we have to do something. Railways are the backbone of our ag economy. Simply put, that’s how we should consider railways."
WHY THE WORK STOPPAGE?
Unionized employees voted 97 per cent in favour of a strike on March 3, and were in a legal strike position as of March 16.
That same day, CP Rail issued a 72-hour notice to Teamsters Canada, saying it would lock out employees if a negotiated settlement couldn’t be reached or if the union wouldn’t agree to binding arbitration.
Federal mediators have been involved in talks since March 11.
The union cites wages, pensions, and working conditions including not being forced to take federally mandated reset days away from home, as its main issues in bargaining.
CP Rail says it previously tabled an offer to address 26 outstanding issues including wages, benefits and pensions, but that the union rejected the offer.
Teamsters Canada issued a statement just before midnight Sunday, saying the company was locking out employees. A few hours later, it released another statement saying members were locked out, but also on strike.
A CP Rail spokesperson says the company offered a new offer late Saturday, but never got a response from the union.
SUPPLY CHAIN AND THE ECONOMY
Industry organizations, chambers of commerce, and farm groups have all warned about the impact a work stoppage will have on the economy at-large, including supply chains and possibly food prices.
Inflatioxjmtzywn has climbed to levels not seen in decades, affecting a range of consumer items from gasoline to meat.
Heavy flooding in British Columbia also impacted the delivery of goods in Canada through the Port of Vancouver.
Russian President Vladimir Putin’s nearly month-long invasion of Ukraine has driven oil prices up and led to concerns about a global wheat shortage. Both Russia and Ukraine are among the world’s top exporters of wheat, along with Canada.
"The entire planet cannot afford a lengthy labour dispute at CP Rail," Charlebois said.
As far the potential impact of the work stoppage on food prices, Charlebois says that will depend on how long the dispute lasts.
Previous strikes involving the Canadian National Railway in 2019, and Port of Montreal in 2020, did not affect food prices, he says.
But with a lack of other reasonable transportation alternatives, should the work stoppage last for even a couple of weeks, Charlebois expects those in the livestock industry to adjust their inventories, which could lead to higher prices at grocery stores, especially for meat products.
"We often talk about our farmers and our ag economy here in Canada, but we have to think about the global picture because of what’s going on in Ukraine," he said.
"The Ukrainian conflict is really impacting the entire agri-food economy around the world. So we need more fertilizers, more grains and everyone is looking at North America to produce more."
BACK TO WORK LEGISLATION
It remains to be seen whether the federal government will pass back-to-work legislation to end the work stoppage.
Canadian Chamber of Commerce President Perrin Beatty has called for legislation to be tabled immediately.
Prior to the work stoppage, Saskatchewan Premier Scott Moe signalled his support for back-to-work legislation in the event of a strike.
The former federal Conservative government passed back-to-work legislation in 2012 to end a CP Rail strike, sending it to arbitration.
The government threatened legislation again during another CP strike, resulting in a deal between the company and union in 2015. The Conservatives also introduced legislation in 2009 to end a CN Rail strike, but a deal was reached before the legislation passed.
The Liberals, meanwhile, introduced back-to-work legislation to end rotating postal strikes at Canada Post just before Christmas in 2018, and at the Port of Montreal in 2021.
Labour Minister Seamus O’Regan would only say during an interview with The Canadian Press Sunday afternoon, that the federal government wants a resolution "now." Both sides were still talking, he said at the time.
"Second day of a work stoppage but CP and Teamsters Rail remain at the table. We have faith in their ability to reach an agreement. Canadians expect them to do that ASAP. Here in Calgary until they do," O’Regan said in a post Monday on Twitter.
The federal New Democrats and some labour leaders have called for bargaining to continue, without back-to-work legislation.
Speaking to reporters on Monday, NDP Leader Jagmeet Singh said bringing in back-to-work legislation would be inappropriate, and his party would be "firmly" against its use.
Instead, Singh called for "pressure" to get the parties talking again.
"We believe that the right thing to do right now is to get back to the negotiating table," he said.
"There is a strong and important role of workers being able to raise concerns, and to be able to use the their ability to strike as a way to raise concerns …."
Dennis Darby, president and CEO of Canadian Manufacturers and Exporters, told CTV News Channel on Sunday that, while "regrettable," the federal government needs to consider back-to-work legislation and forced arbitration.
"I can honestly say, in the last couple of years, we have seen more stress on our supply chain than in the last 25 years, and it has certainly hampered our recovery, of our sector, but of our overall economy," he said.
"And I really hope that they can come to a resolution quickly because we certainly don’t have the slack in our supply chain to be able to deal with yet another major stoppage."
Mark Thompson, professor emeritus at the University of British Columbia Sauder School of Business, also told CTV News Channel on Sunday that he suspects the federal government will impose back-to-work legislation if the work stoppage continues.
"This government has a preference for letting collective bargaining run its course, so they probably won’t do it immediately, but it won’t take long for the pressure to build up to resume shipments, in particular the raw materials coming through the Port of Vancouver," he said.
Thompson says even a week would be a long time for the labour dispute to last.
"The world wants that wheat right now and they’ll be very vocal in their demands that something be done."
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Workers picket the Canadian Pacific Railway headquarters in Calgary, Alta., March 20, 2022. THE CANADIAN PRESS/Jeff McIntosh
