A national rail stoppage is looming across Canada after the two largest railroad operators issued lockout notices to their unionized workforces over the weekend.
Canadian National Railway (CN) and Canadian Pacific Kansas City (CPKC) have notified the Teamsters union representing 10,000 workers that they plan to lockout workers starting on August 22.
However, the lockout notices come after the Teamsters, which represent yard workers, locomotive engineers and conductors, issued 72-hour strike notices to both companies.
A shutdown of the national rail network that stops freight shipments could have a devastating impact on the Canadian economy and impact the U.S. and Mexico where rail is increasingly linked.
The lockout notice was issued after the two railway operators failed to reach new collective agreements with the Teamsters union at the bargaining table.
This is the first time that Canada has faced simultaneous labour stoppages at both Canadian National and Canadian Pacific as the two companies usually negotiate their labour pacts in separate years.
At stake is the shipping of grains, potash, coal and timber which comprise the bulk of Canada’s exports to foreign markets.
The potential economic damage could stretch into the U.S. and Mexico, especially as Canadian Pacific Kansas City’s rail network stretches across all three countries.
Both Canadian National and Canadian Pacific have said that their networks outside of Canada will continue to operate but any work stoppages could have impacts.
The two companies each have several U.S. rail hubs from Chicago south to New Orleans.
The main sticking point in the labour negotiations with the Teamsters is reportedly a plan to force workers to move across Canada for months at a time to fill labour shortages.
Other issues in dispute at the bargaining table include wages and safety, with the union claiming the companies are compromising worker rest periods, increasing the risk of accidents.
Business groups across Canada are calling on the federal government to intervene and prevent a potentially damaging rail stoppage. But, so far, the government has refused to get involved.
The stock of Canadian National Railway has declined 8% this year and currently trades at $154.51 per share.
Canadian Pacific Kansas City’s stock has risen 3% so far in 2024 to trade at $108.16 a share.
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