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Canada’s CP Rail shuts down railroad, workers go on strike

FILE PHOTO: The Canadian Pacific Railyard is pictured in Port Coquitlam
FILE PHOTO: The Canadian Pacific Railyard is pictured February 15, 2015 in Port Coquitlam, British Columbia. REUTERS/Ben Nelms/File Photo

March 20, 2022

By Rod Nickel and Ann Maria Shibu

(Reuters) – The Canadian Pacific Railway (CP) halted operations early on Sunday, locking out workers over a labor dispute, with each side blaming the other for a halt likely to disrupt shipments of key commodities at a time of rising prices .

“We are extremely disappointed with this turn of events,” said Teamsters Canada Rail Conference spokesman Dave Fulton. The union said in a statement it had begun striking across the country in the dispute, which it says has affected 3,000 engineers, conductors and shipyard workers.

Canada’s second-largest rail operator accused the union of misrepresenting the company’s position, saying in a statement that the Teamsters “are aware of the damage this reckless action will do to Canada’s supply chain.”

Labor Secretary Seamus O’Regan Jr. said CP and Teamsters are still at the table with federal agents.

“We are closely monitoring the situation and expect the parties to continue working until they reach an agreement,” he said in a tweet just after midnight.

Canada, the largest country by area after Russia, relies heavily on rail to transport raw materials and manufactured goods to the port. CP’s network covers much of southern Canada and extends as far north as Kansas City in the United States.

The lockout is the latest blow to Canada’s struggling supply chain, which weathered floods in British Columbia last year that washed out the tracks and cut off access to Canada’s largest port. CP said a disruption would disrupt movement of grain, potash and coal.

CP informed the union on Wednesday that it would lock out workers on Sunday unless talks reached a breakthrough on an agreement on pensions, wages and benefits.

The most important negotiating topic is the union’s demand for higher upper pension limits. Chief Financial Officer Nadeem Velani said at an investor conference in New York on Tuesday that Deutsche Bahn was not prepared to accept the request.

Canada’s Nutrien said this week it may have to reduce potash production at its Saskatchewan mines if the shutdown lasts more than a few days.

The last major disruption to railroad work in the country was an eight-day strike by the Canadian National Railway Co. in 2019. But in the last 12 years, there have been 12 service disruptions due to inclement weather, blockages, or labor problems, according to the Western Canadian Wheat Growers Association.

(Reporting by Ann Maria Shibu in Bengaluru and Rod Nickel in Chicago; Editing by William Mallard and Muralikumar Anantharaman)

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DUSTIN JONES

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