CN Rail Strike To Cost Canada’s Economy Billions, But Liberals Reluctant To Intervene

MONTREAL ― Businesses and political leaders in resource-rich provinces are calling with increasingly loud voices for an end to the CN Rail strike, but Trudeau’s Liberals seems reluctant to intervene in contract negotiations.

Industry groups say the strike ― which entered its fourth day on Friday ― has particularly impacted farmers, the forestry industry and oil and gas, all of which rely heavily on rail shipments.

Striking workers are demanding an end to what they call dangerous work conditions and fatigue due to long shifts. They are also opposing a move by CN Rail to reduce prescription drug benefits.

In a report issued Friday, TD Economics estimated that, if the strike lasts until Nov. 30, it will cost Canada’s economy between $1.6 billion and $2.2 billion, but if it drags out until Dec. 5 ― when Parliament resumes ― the cost will be between $2.3 billion and $3.1 billion.

That amounts to just a fraction of one per cent of Canada’s economic output, but given that the economy was already slowing down, this “doesn’t leave a lot of wiggle room for negative shocks,” TD economist Brian DePratto wrote in the report.

“An extended strike risks seeing a near flattening in economic activity to finish the year, and hit an already-challenged goods sector,” CIBC chief economist Avery Shenfeld wrote.


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But so far, those economic arguments aren’t finding purchase with Trudeau’s Liberals, who have jurisdiction over the federally-regulated railway sector.

“For us it’s an appreciation of the collective bargaining process,″ said Labour Minister Filomena Tassi on Thursday, having been named to the portfolio just a day earlier. She added that Ottawa’s chief mediator was at the negotiating table in Montreal.

The federal Liberals have used back-to-work legislation before, namely in 2018 to end a strike at Canada Post.

The Teamsters union ― which represents 3,200 conductors, trainpersons, and yard workers who have been out on strike since early Tuesday ― said Friday that “no substantive progress has been made” in talks.

One of the first impacts of the strike has been a propane shortage, with Quebec down to four days’ worth of propane as of Friday. Premier Francois Legault said the province had already begun rationing to ensure propane supplies reach critical places such as hospitals.

But the union claims Quebec’s propane shortage “appears to be largely manufactured″ by CN Rail amid rising pressure from industry and Prairie politicians.

“CN is far from operating at full capacity, but we believe there are enough trains going around to allow the company to supply propane to Ontario and Quebec,” said Lyndon Isaak, president of the Teamsters Canada Rail Conference, as quoted by CBC News.

“The question is whether CN refuses to transport propane to create a crisis and force a special back-to-work law.”

‘Devastating time’ for farmers

Canadian Federation of Agriculture president Mary Robinson said the strike comes at a “devastating time for farmers” following a delayed grain crop and early snows.

“Farmers do not receive payment for their products until they reach the port, and the rail strike makes this impossible. This will create huge cash flow problems for farmers, who require these payments to pay off their loans, invest in their operations and prepare for the new year.”

With pipeline projects in limbo, oil producers have become increasingly reliant on rail shipments, and the strike sent the price of Canadian crude ― already selling at a steep discount to global oil prices ― down by more than half a dollar in the first two days, to $18.25 a barrel, according to Bloomberg.

A number of politicians including Saskatchewan Premier Scott More and some Alberta cabinet ministers have been prompting Prime Minister Justin Trudeau to convene Parliament earlier than the scheduled date of Dec. 5 to pass back-to-work legislation, or at least to impose binding arbitration.

But if binding arbitration is to happen in time, “we’re talking hours now, not days,” Moe told reporters Thursday.

The Teamsters say they are fighting to end dangerous work conditions and fatigue.

“CN currently requires (union) members to operate trains alone from outside of the locomotive, hanging on to moving trains with one hand while operating a remotely controlled locomotive with the other,” the union said in a statement. 

“Railroaders are expected to do this in rain and in freezing temperatures, sometimes for distances of up to about 17 miles….

“The company also wants to make it more difficult to take time off and make employees work longer hours, in an attempt to get more work done with fewer people and to reduce staffing levels.”

CN Rail rejected the union’s claim that the strike concerns workplace health and safety, suggesting instead that it revolves around worker compensation.

“While the current average salary of a Canadian conductor is $114,000 plus benefits, including a defined benefits pension plan, the union is seeking wage and benefit improvements beyond those negotiated this year with Unifor and another bargaining unit of the TCRC,″ CN said in a release.

CN said it has offered to enter into binding arbitration, with a neutral arbitrator chosen by the parties or appointed by the federal government.

― With files from The Canadian Press

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