Canada’s rail shutdown begins as CN, CPKC lock out workers

SINGAPORE (ICIS)–Canada’s two largest railways have shut their operations after labor contract negotiations hit an impasse.

The shutdown at the Canadian National Railway (CN) and Canadian Pacific Kansas City (CPKC) began at midnight eastern time on Thursday, with more than 9,000 workers locked out after failing to reach an agreement with their employees’ union.

“CN has formally locked out employees represented by [rail labor union] Teamsters Canada Rail Conference (TCRC) as of 22 August at 00:01 eastern time, after the union did not respond to another offer by CN in a final attempt to avoid a labour disruption,” CN said in a statement.

“Without an agreement or binding arbitration, CN had no choice but to finalize a safe and orderly shutdown and proceed with a lockout.”

CPKC in a separate statement announced that it will lock out employees in two stages.

The lockout will first affect members of the TCRC Train and Engine (T&E) division, beginning at 00:01 eastern time on Thursday.

Later, at 00:01 Mountain Time on the same day, members of the TCRC Rail Traffic Controller (RCTC) division will also be locked out.

“CPKC is acting to protect Canada’s supply chains, and all stakeholders, from further uncertainty and the more widespread disruption that would be created should this dispute drag out further resulting in a potential work stoppage occurring during the fall peak shipping period,” the company said.

“Delaying resolution to this labor dispute will only make things worse.”

The simultaneous rail disruption at CN and CPKC has been looming over the chemical and other industries for months.

Canada’s chemical production is heavily geared towards export, with 80% destined for foreign markets – primarily the US, accounting for 80% of exports.

Rail transportation plays a crucial role, handling over 70% of Canadian chemical producers’ shipments, with some relying entirely on rail.

Officials from the chemical and other industries have repeatedly warned about the impacts simultaneous disruptions at both railroads could have on Canada’s already weak economy and on trade with the US.