Analysis of the causes of labor disputes and railway shutdowns in Canada

Work on two major Canadian rail lines was halted early Thursday morning amid strained contract negotiations between the railroad and the Teamsters of Canada, which represents nearly 10,000 rail workers. said his government would take action to resolve the dispute, The shutdown could have severe repercussions for the Canadian economy and supply chains in the United States and Canada.

The two railroads, Canadian National Railway (CN) and Canadian Pacific Kansas City Railway (CPKC), have been negotiating with unions for months. So far, the Canadian government has not forced either party to avoid a work stoppage. But if the situation persists, the federal government may step in and force 9,300 workers to quit. Pass legislation to get workers back to work, as has been done in past labor disputes.

The two rail lines facilitate the movement of people and about $740 million worth of freight across the country’s vast interior every day. The suspension was the result of the railroads prohibiting their workers from working, not a strike. The companies argued that the suspension was necessary to ensure a safe, controlled reduction in operations and that if they had waited for operators to strike, the companies would not have had time to secure hazardous materials or work out supply arrangements with key customers.

Currently, the impact of the shutdown is mainly concentrated in the Canadian economy, but because about 75% of Canada’s exports (including coal and agricultural products) are sold to the United States, if the dispute is not resolved quickly, it may have an impact on the US supply chain.

The two railroads signed contracts with the Teamsters in December 2023Since then, both sides have accused each other of refusing to accept reasonable terms.

The main concern of the unions is According to its public communicationsThe companies, which include Canadian National and Canadian National, have been arguing over worker safety and rest breaks, as well as predictable work schedules. They also claim Canadian National has given them unrealistic relocation notices — forcing workers to relocate for months at a time to deal with staffing shortages.

Rail workers voted to strike as early as May, claiming the railroad was not negotiating in good faith and trying to sabotage improvements to working conditions, proposing to change some jobs to hourly pay instead of monthly payments and to eliminate Get enough rest.

“There are trains all across Canada that move freight, energy and chemicals,” said Francois Laporte, national president of the Teamsters of Canada. Tell the BBC Thursday. “We want to make sure the drivers of those (trains) are well rested, safe and not fatigued.”

Canadian rail transports goods such as coal and potash fertilizer Important ingredients in fertilizers — and cooking oil, Propane and Frozen Foods.

Many freight movements within Canada and between Canada and the U.S. have been suspended; as of Tuesday, CPKC had stopped freight from the U.S. to Canada. About 2,500 U.S. trains bound for Canada will not run each day during the shutdown.

Some organizations, including the U.S. Chamber of Commerce, the American Farmers Federation, and the National Cotton Council of America, have warned that if the shutdown continues, it will have a devastating impact on the U.S. supply chain and economy.

Groups including the American Farmers Federation and the National Cotton Council claimed in a letter to President Joe Biden on Monday that if the strike continues, it could have “detrimental consequences for Canadian and U.S. agricultural producers, the agricultural industry, and domestic and global food security.” The Washington Post reported.

While it’s hard to say exactly how this will affect the U.S. economy, if the shutdown continues, prices for some agricultural products could rise, affecting consumers already suffering from high food costs. Sanitation facilities could be affected because many health departments rely on chlorine shipped from Canada to treat wastewater. The automotive industry could also be affected; According to data from the Bureau of Transportation Statistics in JuneCars and auto parts accounted for the bulk of rail shipments from the U.S. to Canada in June. Without a labor deal, some U.S. auto plants could be forced to close by the end of the week.

Container ships that are unable to unload at Canadian ports may need to reroute to the United States, which could lead to a backlog of cargo at U.S. ports and cause supply chain disruptions.

Barry Prentice, director of the University of Manitoba’s Institute of Transportation Studies, said that while the Canadian federal government may pass a return-to-work bill in the coming days, supply chain issues will become more apparent as the shutdown lasts longer. Tell the BBCThe government also has the power to force companies and unions into private arbitration; while companies have said they are open to the idea, unions — as well as Trudeau and his allies — have been cool to it.

If legislation were to be adopted, it would likely only obscure the real disputes rather than resolve them. Just like the US return to work bill in December 2022Forcing workers back on the trains without a solution and a new contract will only make the problem worse.