Canada Braces for Industrial Action at Freight Rail Companies

Canada is poised to experience industrial action at its two leading freight rail companies starting this Thursday, as employers and employees remain at an impasse over labor agreements.

On Sunday, Canadian National Railway formally informed the Teamsters union in Canada that it will begin locking out union workers early on Thursday.

"Unless there is an immediate and definite resolution to the labour conflict, CN will have no choice but to continue the phased and progressive shutdown of its network which would culminate in a lockout," the company stated.

"Despite negotiations over the weekend, no meaningful progress has occurred, and the parties remain very far apart."

Canadian Pacific Kansas City (CPKC), Canada’s other major rail operator, has already notified the Teamsters union that it will also start locking out members early on Thursday.

In response, the Teamsters issued a 72-hour strike notice to CPKC late Sunday. "Unless parties reach last-minute agreements, a work stoppage will occur at 00:01 on Thursday, August 22," the union said in a statement.

Starting tomorrow, CPKC plans to halt all shipments originating in Canada and those coming from the U.S. destined for Canada. Meanwhile, CN has suspended container imports from its U.S. partner railroads.

Labor agreements for both rail companies expired at the end of 2023, and negotiations have been ongoing since. Despite this, the companies have indicated that their U.S. operations will continue as usual.

Under Article 107 of the federal labor code, Labor Minister Steven MacKinnon has the authority to order the parties into binding arbitration. This measure was used by his predecessor last year to resolve a dockworkers strike in British Columbia. However, in that instance, the parties had largely agreed on the framework of a deal, unlike the current rail dispute.

This impending strike could mark the beginning of a challenging period for North American supply chains, with the potential for additional industrial action by dockworkers across the U.S. East and Gulf coasts on October 1.