Canada’s government intervenes to end freight rail shutdown

TORONTO (ICIS)–Canada’s federal labor minister has decided to refer the labor dispute between the country’s two freight railroads and labor union Teamsters Canada Rail Conference (TCRC) to the Canada Industrial Relations Board (CIRB) for binding arbitration, he said in a webcast media briefing on Thursday.

Steven MacKinnon expects the CIRB to act “with dispatch” and rail services at railroads Canadian National (CN) and Canadian Pacific Kansas City (CPKC), which shut down effective Thursday morning, 00:01 eastern time, should resume within a couple of days, he said.

With the decision, the minister reversed his previous position.

Just hours before the shutdown took effect, he had said the government would not intervene but leave it to the parties to settle the dispute through the collectives bargaining process, and last week he rejected CN’s call for binding arbitration.

However, in Thursday’s press briefing MacKinnon said that he came to the conclusion that the negotiations between the railroads and the union were at an impasse and that collective bargaining was not working to settle the dispute.

He therefore decided to direct the CIRB

• to settle the dispute through final binding arbitration;
• to extend the terms of the existing collective agreements until new agreements are signed.

The CIRB process was “generally a process that does not take longer than two days”, he said.

However, he conceded that it was not yet quite clear when exactly rail service will resume, adding that the CIRB was an independent body that follows its own procedures.

The CIRB is a quasi-judicial tribunal charged with keeping the industrial peace in Canada.

The government has come under intense pressure from trade groups in Canada and the US and from Canadian provincial premiers (governors) to take quick action to end the shutdown, which threatened the economy and trade relations with the US.

MacKinnon acknowledged the concerns raised by the chemical and fertilizer industries about supplies of chlorine to treat drinking water and the supply of potash fertilizer to farmers.

It was up to the government to ensure that shipment of chlorine and fertilizer were not disrupted, the minister said.

The railroads had stopped accepting shipments of chlorine and other hazardous materials well ahead of the 22 August shutdown.

Meanwhile, LyondellBasell on Thursday declared force majeure on all rail shipments to Canada and industrial chemical producer Chemtrade Logistics warned about impacts from the rail disruption on its financial results.

With additional reporting by Adam Yanelli

Thumbnail photo source: CN