The Canadian government has stepped in to prevent a prolonged disruption to freight rail services by ordering Canadian National Railway (CN) and Canadian Pacific Kansas City (CPKC) to enter into binding arbitration with their labour union, the Teamsters Canada Rail Conference. The move came after the two railroads locked out over 9,000 unionized employees following failed contract negotiations.
Labour Minister Steve MacKinnon stated that the government will do everything possible to preserve stability and certainty in Canada’s economy, as the country heavily relies on rail transport for its exports. The decision to intervene was made to avoid serious damage to the economy and supply chains connecting Canada with the United States and Mexico.
The 17-hour shutdown of freight services not only disrupted commuters in major cities like Toronto, Montreal, and Vancouver but also posed a threat to the Canadian economy. About 50% of Canadian exports are transported by rail, with freight services moving goods valued at 380 billion Canadian dollars in 2022. An estimated economic loss of $1 billion for a week-long shutdown led to the government’s intervention to prevent further damage.
While CN and CPKC have agreed to resume services after the arbitration process, the Teamsters Canada Rail Conference expressed disappointment in the government’s decision to bypass collective bargaining. Despite the challenges in reaching a negotiated deal, efforts are being made to ensure the swift resumption of rail services to minimize disruptions to the supply chain and economic activities.
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