Prime Minister Justin Trudeau’s government has taken action to resolve a work stoppage that halted operations at Canada’s two largest railways, Canadian National Railway Co. and Canadian Pacific Kansas City.
The shutdown, which began just after midnight on Thursday, threatened to cause significant economic disruption.
Labor Minister Steven MacKinnon announced on Thursday afternoon in Ottawa that the Canada Industrial Relations Board has been asked to impose binding arbitration between the railways and the Teamsters union.
He also ordered an extension of the current labor contract and called for immediate resumption of rail operations.
MacKinnon expressed confidence that these measures would get trains running again, but acknowledged that the final decision rests with the independent industrial relations board.
The board will now consult with both sides, and MacKinnon hopes for a swift resolution that will return railway employees to work.
The two railways control about 80% of Canada’s rail network, and a prolonged shutdown could have severe economic consequences.
A two-week lockout could cost Canada’s economy up to C$3 billion, including significant losses in labor income and corporate profits, according to the Conference Board of Canada. Moody’s estimates the potential impact could be as high as C$4.8 billion.
Negotiations between the railways and the Teamsters union have been contentious, with both sides remaining far apart.
The Teamsters, representing over 9,000 workers, have been pushing for provisions to address scheduling and crew fatigue, as their previous collective agreements expired on December 31, 2023.
Business groups in Canada and the U.S. had urged the Canadian government to intervene, as the lockout disrupted critical supply chains for commodities like coal, wheat, fertilizer, and lumber, with few alternative shipping options available.
Last week, the federal government had denied Canadian National’s request for arbitration, encouraging both parties to negotiate a deal at the bargaining table, but those efforts failed to produce an agreement.
