Canadian government moves to ends nationwide rail strike

Canada’s federal government has moved to end a nationwide rail strike that threatened to grind supply chains to a halt, less than a day after it began.

With the government saying it would force the union and rail companies into binding arbitration, picket lines came down and workers at Canadian National Railway (CN) were ordered to return to work on Friday, the Teamsters union said.

But the union also said a stoppage at Canadian Pacific Kansas City (CPKC) would continue as they waited for an order from the country’s industrial relations board.

Canada’s top two railways had locked out more than 9,000 unionised workers on Thursday, triggering a simultaneous rail stoppage that business groups said could inflict hundreds of millions of dollars in economic damage.

The Canadian government announced on Thursday that it would ask the country’s industrial relations board (CIRB) to issue a back-to-work order that should come soon. The CIRB, which is independent, will consult the companies and unions before issuing an order.

CN had said it would end its lockout on Thursday at 6pm ET. CPKC said it was preparing to restart operations in Canada and further details on timing would be provided once it received the CIRB’s order.

In a broadcast to CN employees, the company said any failure to report to work Friday “would be considered illegal job action” and could result in “discipline up to and including termination”.

In response, the union told members in a memo that the company was “again attempting to put profits and operational ease ahead of your personal safety and the safety of the public … we do not have faith [CN] will miraculously begin to care for your wellbeing.”

The federal labour minister, Steven MacKinnon, told reporters he assumed the trains would be running “within days” following the end of the strike.

As well as requesting a back-to-work order, MacKinnon asked the board to start a process of binding arbitration between the Teamsters union and the companies, and extend the terms of the current labour agreements until new agreements have been signed.

The sides blamed each other for the stoppage after multiple rounds of talks failed to yield a deal.

In a statement posted on X in the early hours on Friday, the Teamsters union said it had taken down picket lines at CN.

A CN spokesperson, Jonathan Abecassis, told the Canadian Broadcasting Corp it could take the company a week or more to catch up on shipments.

MacKinnon’s decision marked a change of mind by the Liberal government of the prime minister, Justin Trudeau, which had said it wanted to see the matter settled at the bargaining table.

“We gave negotiations every possible opportunity to succeed … but we have an impasse here,” MacKinnon said. “And that is why we have come to this decision today.“

Business groups and companies had demanded action by the government.

Trudeau, in a post on X, said “collective bargaining is always the best way forward”, but added governments must act when faced with serious consequences to supply chains and the workers who depended on them.

Canada is the world’s second largest country by area and relies heavily on railways to transport a wide range of commodities and industrial goods. Its economy is heavily integrated with that of the US, meaning a stoppage could disrupt North American supply chains.

The Canadian Manufacturers & Exporters, an industry group, said: “We are pleased the government has responded to our calls to intervene … A prolonged stoppage would have imposed enormous costs on Canadian business.”

The rail companies previously said they had been forced into the lockouts to avoid strikes at short notice. They said they had bargained in good faith and made multiple offers with better pay and working conditions.

Paul Boucher, the head of the Teamsters rail union, had accused CN and CPKC of being “willing to compromise rail safety and tear families apart to earn an extra buck”.

Unions typically do not want contracts decided through arbitration as it removes their leverage from withholding labour to secure better terms.

The left-leaning New Democratic party, which has traditionally received strong union support and props up Trudeau’s government, opposed the government’s decision.

“Justin Trudeau has just sent a message to CN, CPKC and all big corporations – being a bad boss pays off,” the party’s leader, Jagmeet Singh, said in a statement.

The stoppage has crippled shipments of grain, potash and coal while also slowing the transport of petroleum products, chemicals and vehicles.

Tens of thousands of people who depend on certain commuter rail lines into Toronto, Vancouver and Montreal were also affected by the lockouts, since all train movement on these CPKC-owned lines had halted indefinitely.

The stoppage was largely rooted in scheduling, availability of labour and demands for better work-life balance, according to the union and companies. Ottawa introduced new duty and rest-period rules in 2023.