CN and CPKC Ordered to Resume Rail Operations

Although the two rail companies ended the lockout following CIRB's order, Teamsters Canada challenged it and said it would take it to court if necessary.

On Saturday, the Canada Industrial Relations Board (CIRB), appointed to resolve the dispute between the Teamsters union and railway companies CN and CPKC, ordered the two companies to resume their rail operations.

However, TCRC notified CN that if a new contract is not reached before 10 a.m. ET on Monday, August 26, its 6,500 railroad workers will continue their strike.

Following the CIRB order, Canadian Pacific Kansas City (CPKC) issued a statement on Sunday, announcing it would restart its rail operations in Canada at 00:01 ET on Monday, August 26.

Similarly, the Canadian National Railway (CN) ended the lockout and immediately initiated a recovery plan to resume full operations. However, the company said it was disappointed that a deal could not be negotiated at the bargaining table.

CN and CPKC stated that it could take several weeks to resume full operations since they began gradually shutting down their networks more than a week ago. This action left shipments stranded on customer loading docks and ports nationwide.

Most of Canada's freight, valued at over 1 billion Canadian dollars (US$730 million) daily and totaling more than 375 million tons of cargo last year, came to a standstill last Thursday—across almost 32,000 kilometres of track—because of the strike and lockout.

The rail stoppage also impacted around 30,000 commuters in Canada, given that a significant number of trains use CPKC lines.

Moreover, the rail strike impacted rail shipments crossing the U.S. border, although CPKC and CN’s trains continued their rail operations in the U.S. and Mexico. According to the U.S. Department of Transportation (DOT), the value of goods moving each month between Canada and the U.S. via rail is in the billions of dollars.

Several smaller short-line freight rail companies that deliver local shipments within Canada continued to operate, but they were unable to transfer shipments to CN and CPKC railroads while they were inoperable.

The government intervenes to end the rail strike

Negotiations between the two rail companies and the Teamsters Canada Rail Conference (TCRC) failed to reach an agreement, so last week, the government forced both parties into arbitration that the CIRB would oversee.

Almost 16 hours after the rail strike started and a week after embargoes on sensitive and dangerous goods were issued, Canadian Minister of Labour Steven MacKinnon called on the two parties to end the strike to avoid an economic disaster. 

CIRB orders rail companies to resume operations

Two days after MacKinnon commanded CIRB to start the arbitration process, the board came to a decision that CN and CPKC must end the strike and return to work.

MacKinnon announced the CIRB’s decision on social media platform X and said he expects CN and CPKC to resume their rail operations as soon as possible. He also noted that the parties were at an impasse in contract talks and that Canadian businesses and trade relationships were at stake.

CIRB Chairperson Ginette Brazeau wrote in a pair of rulings, "The board has concluded that, in this case, it has no discretion or ability to refuse to implement, in whole or in part, the minister's directions or to modify their terms.”

Brazeau ordered both companies and the relevant conductors, dispatchers, and yard workers to recommence all rail operations at 12:01 a.m. on Monday.

TCRC to challenge CIRB’s order

TCRC, representing more than 9,000 rail workers, said it will comply with the CIRB order and send its members back on the job. However, it will proceed with a legal challenge of the order.

In a statement, TCRC declared it would “lawfully abide by the decision but will undertake steps to challenge to the fullest extent.”

“Unfortunately this will not provide immediate relief but the Union is prepared to appeal to federal court if necessary,” the statement also included.

Paul Boucher, President of the Teamsters Canada Rail Conference (TCRC), said, "This decision by the CIRB sets a dangerous precedent."

“It signals to corporate Canada that large companies need only stop their operations for a few hours, inflict short-term economic pain, and the federal government will step in to break a union," he continued. "The rights of Canadian workers have been significantly diminished today."

Moreover, Francois Laporte, President of Teamsters Canada, said, “This is not about disobeying the minister’s order. It’s about exercising our right.”

“We will exercise our right within the legal framework," he continued.

U.S. rail companies take steps to avoid similar disruptions

In light of the rail strike in Canada, Eastern U.S. railroad company CSX initiated talks with 12 unions and announced initial agreements for new employee contracts.

CSX President and Chief Executive Joe Hinrichs said, “We are incredibly pleased to have reached these tentative agreements ahead of the re-negotiation process, reflecting our strong commitment to collaboration with our union partners.”

“These agreements are a testament to the hard work and dedication of all parties involved, ensuring a bright future for our workforce and the sustained success of CSX operations. Together, as ONE CSX, we are building a path forward that benefits our employees, our customers, and the communities we serve,” he continued.

This came shortly after American U.S. rail companies BNSF and Norfolk Southern stated that they, too, had negotiated early contracts with several of their unions.

This move by U.S. rail companies highlights the growing power of labour unions and aims to avert similar disruptions in the U.S., which could adversely affect the economy.

In 2022, U.S. railroads almost witnessed a stoppage following union concerns about demanding worker schedules and paid sick leave. President Joe Biden and Congress intervened, forcing workers to accept a deal and averting a potential rail strike.

For more information about this story and its impact on your freight operations, please reach out to one of our trade professionals.