Canada government wobbles amid fallout from rail labor dispute

TORONTO (ICIS)–Canada’s Liberal-led minority government under Prime Minister Justin Trudeau is paying a heavy price for its decision last month to end the labor dispute at freight railroads Canadian National (CN) and Canadian Pacific Kansas City (CPKC) through binding arbitration.

The left-leaning New Democratic Party (NDP) on Thursday confirmed that it cancelled a “supply and confidence agreement” from 2022 under which it supported the Liberals, which hold only a minority of parliamentary seats.

The NDP is close to labor trade unions and had warned Trudeau repeatedly not to intervene in the dispute.

In a televised press conference on Thursday, NDP leader Jagmeet Singh said the government’s intervention added to “mounting evidence” that the Liberals were “too beholden to corporate interests”, making it impossible for the NDP to continue supporting them.

Singh alleged the railroads had “colluded” to set up a scenario in which both companies were in a labor dispute at the same time, and that they had negotiated in “bad faith”.

Instead of allowing the dispute to be settled through the collective bargaining process, the government, by ordering binding arbitration, awarded the companies for their conduct, he said.

After a four-day freight rail shutdown at both CN and CPKC last month, the government directed a labor tribunal to end the shutdown and settle the dispute through binding arbitration. Freight rail service resumed on 26 August.

From now on, the NDP’s voting in parliament would be case-by-case, based on what the party deems best for workers and families, Singh said.

Voting non-confidence would be “on the table” and an early election was now more likely, he said.

If the NDP joins the Conservatives and other opposition parties in voting against the government on the next confidence measure, the government will fall and an election has to be held.

Seats in parliament (total: 338):

Liberals	Conservatives	Bloc Quebecois	NDP	Others
154	119	32	24	9

Political commentators said that the NDP cancelled the agreement as it needed to distance itself from the Liberals, who after nine years in government are unpopular and are far behind the Conservatives in opinion polls.

Singh rejected suggestions that by ending the agreement with the Liberals he was opening the door to a Conservative government.

The NDP would be running against both Liberals and Conservatives, he said.

Trudeau would “always cave to corporate greed”, and the Conservatives, if elected, would be worse, he said.

The Conservative Party, which is supportive of Canada’s oil and gas industry, has pledged that if elected it would immediately abolish the consumer carbon tax implemented by the Liberals.

There is a possibility that the Liberals may now look to opposition party Bloc Quebecois (BQ) for support – the BQ is advocating for Quebec to secede from Canada and become an independent nation.

Rail labor union Teamster Canada welcomed the NDP’s decision to stop supporting the Liberals.

The union has filed court challenges against the government decision to end the labor dispute through binding arbitration.

Meanwhile, total Canadian freight rail traffic – intermodal and railcars – fell 5.8% year on year for the week ended 31 August.

Industry officials have said it may take weeks for supply chains to normalize after last month’s shutdown.

The following table by the AAR shows total Canadian freight rail data for the week ended 31 August and for the first 35 weeks of 2024:

In Canada’s chemical industry, producers rely on rail to ship more than 70% of their products, with some exclusively using rail.

Thumbnail photo of Prime Minister Justin Trudeau meeting students at college in Ontario in May; photo source: Government of Canada