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Message from the President – May 2024

With a second consecutive summer of supply chain uncertainty looming large, the federal government has referred a question to the Canada Industrial Relations Board (CIRB), delaying potential labour disruption that could otherwise have begun on May 22nd.

The question is ‘what, if any, rail activity must continue during a strike or lockout at Canada’s two Class 1 railways, CN and CPKC?’

Both companies – which collectively transport hundreds of billions of dollars’ worth of goods annually and roughly half of Canada’s exports – are currently negotiating new collective bargaining agreements with their respective unionized locomotive engineers, conductors, and yard workers. CPKC rail traffic controllers are also in the mix that, in total, includes roughly 9,000 employees from coast to coast.

The negative impact of a strike or lockout of that scale would be extensive.

Not only would Canada’s two Class 1s be idled, there would be deep impacts on trucking, transloading, warehousing, and port operations. Shortline railways (the focus of this month’s newsletter and the subjects of a great conference this past month in Ottawa) would be affected. Several passenger rail services, including several of Canada’s largest commuter railways, would be paralyzed.

Federal politicians – in ushering a bill through Parliament that would ban the use of replacement workers in federally regulated workplaces – are signalling to all sides not to expect back to work legislation if a work stoppage does happen. As it did with port strikes in British Columbia last summer, the government is putting its chips ‘all in’ on a negotiated settlement ‘at the table.’ And Opposition parties are unlikely to come to the government’s assistance, even if a bill to end or prevent a labour disruption is tabled.

What’s looking very likely at this point is that supply chains and the economy will face a rough ride over the summer. CN and CPKC have tabled several offers to union leaders (from the Teamsters Canada Rail Conference) including – in CPKC’s case – an offer to go to binding arbitration. So far, each of these offers has been rejected.

The government’s referral to the CIRB has not only delayed legal labour action by a few weeks or months until the CIRB renders a decision, but perhaps more importantly, it has prolonged the uncertainty hanging over Canada’s supply chains, further tarnishing Canada’s reputation as a reliable trading partner. This is a high-stakes gamble.

Another summer work stoppage would impact approximately $1 billion in goods every day, inflicting a major hit on Canada’s economy. And the ripple impacts will hurt consumers across Canada and commuters in the Canada’s three largest cities, at a time when cost of living and affordability concerns are top of mind.

There is a better way. RAC continues to advocate for solutions that would give the government more tools, not fewer, to deal with labour disputes of this nature. We continue to believe that Cabinet should have additional powers, when all attempts to reach a negotiated settlement have failed, to break an impasse without having to rely on back-to-work legislation. Work stoppages and the devastating impacts they cause could be avoided altogether.

Right now, the real question is: how much economic damage will it take, and how deep must the pain for consumers and commuters pain be, to bring the wisdom of these proposals into focus for federal policy- and decision -makers?