CP Rail shutdown begins as talks continue and farmers brace for potential fallout

Canadian Pacific Railway and the union representing employees are pointing fingers at each other in the shutdown of railway operations that began early Sunday and threatened to further disrupt supply chains.

Company, union blame each other as operations shut down on Sunday

A railway worker boards the front of a red locomotive.
An employee boards a Canadian Pacific Railway locomotive at a yard in Calgary on Friday. A shutdown of Canadian Pacific Railway operations began early Sunday. (Jeff McIntosh/The Canadian Press)

Canadian Pacific Railway and the union representing employees are pointing fingers at each other in the shutdown of railway operations that began early Sunday and threatened to further disrupt supply chains.

However, both sides said they were still talking with federal mediators Sunday.

Canadian Pacific (CP) spokesperson Patrick Waldron told CBC News the company was at the negotiating table with federal mediators Saturday in Calgary, and sent a new contract offer to the union that evening.

"We never got a response," he said.

Waldron said they were at the bargaining table when Teamsters Canada Rail Conference (TCRC) union put out a "dishonest and irresponsible" announcement that CP had locked out their employees. He said TCRC began withdrawing employees before the midnight deadline, and said this is a strike and not a lockout.

"To be clear, the TCRC took unilateral strike action," Waldron said in an interview. "CP did not lock out its workers."

Waldron said the company wanted to keep talking then, still wants to keep talking, and wants an immediate end to the dispute. He said Canadian Pacific supports the government taking action.

"We want to see a swift end of this," Waldron said. "We didn't want to see this happen, and we're very disappointed to find ourselves in this position."

Picketing underway across Canada

TCRC, which represents some 3,000 engineers, conductors, yard workers and other train employees, issued a release just before midnight saying a lockout was being initiated by management at the Calgary-based railway.

"As Canadians grapple with a never-ending pandemic, exploding commodity prices and the war in Ukraine, the rail carrier is adding an unnecessary layer of insecurity, especially for those who depend on the rail network," the statement said.

The union then issued a subsequent release that said in addition to the lockout, TCRC members were also on strike throughout the country, with picketing underway at various Canadian Pacific locations.

Teamsters Canada Rail Conference members picket at the Canadian Pacific yard in Regina. (Cory Herperger/CBC)

Waldron said that as a result of the work stoppage, the railway was safely executing a Canada-wide shutdown of its services.

The office of federal Labour Minister Seamus O'Regan said in a statement that while the work stoppage had begun, both parties were still at the bargaining table with mediators and it expected "the parties to keep working until they reach an agreement."

The more than two dozen outstanding issues in the dispute include wages, benefits and pensions.

"CP and Teamsters Rail continue their work today. Canadians are counting on a quick resolution," O'Regan said on Twitter.

O'Regan told CBC News that both parties are aware that many Canadians are worried about supply chain disruptions, noting that the economy is still "reeling from COVID and from the floods that occurred through much of the West last year."

Perrin Beatty, president of the Canadian Chamber of Commerce, said O'Regan must table back-to-work legislation immediately.

"This work stoppage will have a deep and adverse impact for all Canadian businesses, both big and small, who rely on rail for their supply chain," Beatty said. "This severe damage to Canadian supply chains at a time of heightened global uncertainty will extend beyond our borders and harm our reputation as a reliable partner in international trade."

WATCH | CP Rail shutdown begins but talks continue:

CP Rail shutdown sees 3,000 workers off the job

2 years ago
Duration 2:45
Canadian Pacific Railway operations are at a standstill because of a contract dispute between the company and the Teamsters Canada Rail Conference union that's left roughly 3,000 employees off the job.

The House of Commons resumes Monday following a two-week break, so legislation could come as early as that day. 

O'Regan remained hopeful on Sunday that CP Rail and the union would come to an agreement, and that government intervention would not be needed.

"The best deals, the longest lasting ones, the ones that are most resilient are the ones that are arrived at the table by both parties," he said.

Fertilizer Canada, a group representing manufacturers, wholesale and retail distributors, also called on the federal government to take immediate action.

"Canada cannot afford another disruption to our supply chain," Karen Proud, the group's president and chief executive officer, said in a statement Sunday morning. "Seventy-five per cent of all fertilizer in Canada is moved by rail. During the lead-up to spring seeding, every day, frankly every hour, counts."

Tom Steve, general manager of the Alberta Wheat and Barley Commissions, echoed this, saying the farmers need the fertilizer to have a strong growing season, especially after last year's drought.

"The timing is really bad, particularly for farmers coming out of the worst drought in 20 years. So a lot of them are short of cash flow. And if they can't move that last bit of crop in a timely fashion, that's going to affect their ability to finance the crop," he said.

"We always have a significant percentage of fertilizer that moves on to farms in the spring season, and so [the strike] will create a logistical nightmare."

Tom Steve, general manager of the Alberta Wheat and Barley Commissions, said farmers can't afford to lose rail service for more than a few days. (Terri Trembath/CBC)

Barry Prentice, a professor in the department of supply chain management at the University of Manitoba's Asper School of Business, said fertilizer, grain and wood shipments would be impacted by railway disruptions.

But he doesn't predict any food shortages, and said he doesn't expect the federal government to allow strike to drag on because supply chains are already very fragile.

"This is a very bad time right now. We have a lot of disruptions in the supply chain and some commodities," Prentice said, adding that 50 per cent of Canada's freight moves on railways.

"So, I don't think they're going to allow this to carry on."

Last week, about 45 industry groups warned that any disruption of rail service would hinder Canada's freight capacity and hurt the broader economy as it grapples with inflation, product shortages, rising fuel costs and the Russian invasion of Ukraine.

"This will probably be the most expensive crop that is seeded in western Canadian history," Steve said.

'You're going to see a lot of hurt'

Steve as well as Bob Lowe, president of the Canadian Cattlemen's Association, said if the union and management aren't able to work together, they'd like to see them move into binding arbitration.

Steve said grain farmers can't afford a work stoppage of more than a few days.

Cattle farmers are worried about getting enough feed for their animals. Last year's drought forced them to rely on corn being delivered by rail from the U.S.

 "You're going to see a lot of hurt if it lasts two weeks," said Lowe.

"There's just not enough trucks on the planet to get enough corn up here to make a difference."

Bob Lowe, president of the Canadian Cattlemen’s Association, says cattle farmers are heavily relying on getting feed from the U.S. by train because last year's drought created a huge shortage in Canada. (Terri Trembath/CBC)

Lowe has spoken to policymakers, Canadian Pacific and the union to explain how dire of a situation a halt to rail service would create. 

He expects they will need to import 400 times the amount of feed from the U.S. than they did last year.

"A rail strike is never a good thing, but this one hits us right where it hurts."

With files from CBC's Terri Trembath, Dominika Lirette, Yvette Brend, Marina von Stackelberg and The Canadian Press