Nationwide rail shutdown by CN and CPKC brings freight and commuter services to a halt as union talks reach deadlock

Canada’s two largest railways, Canadian National Railway Co. (CN) and Canadian Pacific Kansas City Ltd. (CPKC), have initiated an unprecedented nationwide shutdown, locking out their employees after months of increasingly tense negotiations. This shutdown has brought freight traffic to a complete standstill and disrupted commuter services across the country, significantly impacting supply chains already strained by the pandemic and last year’s port strike.

On Thursday morning, rail workers from coast to coast set up picket lines, while employees gathered to protest outside CN’s headquarters in Montreal and CPKC’s office in Calgary, holding signs to voice their grievances.

Both sides have pointed fingers at each other for failing to negotiate in good faith. The rail companies have called for binding arbitration, but this proposal was rejected by the Teamsters Canada Rail Conference union.

Teamsters Canada president Francois Laporte emphasized the union’s commitment to settling the dispute at the bargaining table, rejecting third-party arbitration that could leave workers’ conditions in the hands of an outsider for years to come. The union claims that both CN and CPKC are seeking to undermine protections related to rest periods and scheduling, with CN also proposing a controversial “relocation scheme” that could force employees to temporarily move to distant locations to fill labor gaps.

CN insists it has been negotiating in good faith, offering improved pay, better rest conditions, and more predictable schedules. However, the company criticized the Teamsters for not demonstrating urgency in reaching a deal that benefits all parties, including the broader economy.

The shutdown has not only halted the movement of goods but also disrupted the daily commute for over 32,000 passengers in major cities like Toronto, Montreal, and Vancouver, as passenger trains that rely on CPKC-owned tracks cannot operate without the presence of traffic controllers, who have been locked out.

Ontario Premier Doug Ford expressed concern on social media, stating that the shutdown is already affecting workers, transit users, and businesses across the country, and urging that the situation should not be allowed to worsen.

For weeks, industry groups and government officials have been pressing for a resolution, with increased calls for the federal government to intervene. Business leaders have urged Ottawa to impose binding arbitration and prevent further strikes and lockouts to safeguard the economy.

The Canadian Chamber of Commerce criticized the government for not taking action to prevent the shutdown, calling on the labor minister to use the powers available under the Canada Labour Code to restore industrial peace.

Canada’s railways move about $1 billion worth of goods each day, according to the Railway Association of Canada. Most of the over 180,000 railcars operated by CN and CPKC weekly—carrying essential goods such as automobiles, agricultural products, and consumer goods—were already sidelined by a phased wind-down that began last week.

According to Moody’s, the work stoppage could cost the Canadian economy $341 million per day, with sectors like agriculture, forestry, and manufacturing among the hardest hit.

The Teamsters union represents 6,000 CN workers and 3,300 CPKC workers. Normally, the two companies negotiate new contracts with employees on staggered timelines, but in 2022, CN requested a yearlong extension to the current collective agreement, aligning the bargaining periods and leading to the current standoff.

Prime Minister Justin Trudeau has urged both sides to find a resolution at the bargaining table, recognizing the significant concerns among Canadians.

NDP Leader Jagmeet Singh has warned that his party’s support for the Liberal government could be at risk if back-to-work legislation is introduced in a confidence vote.

CN has stated that its engineers, who operate the trains, earn an average of $150,000 annually, while conductors, responsible for managing train cars and loading cargo, earn $121,000 before benefits. These roles often involve long hours and challenging working conditions. CPKC noted that its employees receive comparable, though slightly lower, compensation.