TORONTO — A Canadian arbitrator appointed to settle a bad rail labor dispute to protect the North American economy has ordered employees at the country’s two major railroads to return to work so both sides can resume operations.
Saturday’s order means Canadian National will be able to continue operating trains that restarted Friday morning just one day after locking out workers. But Canadian Pacific Kansas City likely won’t be able to resume operations before 12:01 a.m. Monday, when workers are told to return.
Railroads play an important role in the economy with CPKC and CN shipping more than CA$1 billion (US$730 million) per day and carrying billions of dollars in goods between the US and Canada each month. Although both companies’ trains in the United States and Mexico continued to operate, the lockout caused significant disruption. A number of smaller short-line freight railroads that handle local shipments continue to operate across Canada, but cannot deliver shipments to one of the major railroads when they are idle.
The Teamsters union representing the workers said that it will comply with the Canadian Industrial Relations Board order and send a member back on the job, but will also move forward with a legal challenge of the arbitration order.
“This CIRB decision sets a dangerous precedent. It signals to Canadian companies that large companies only have to stop operations for a few hours, causing short-term economic pain, and the federal government will step in to destroy unions,” said Paul Boucher, President of the Rail Conference The Canadian Teamsters, which represent more than 9,000 engineers, conductors and dispatchers on both railroads.
“Canadian workers’ rights have been greatly reduced today,” added Boucher.
Labor Minister Steven MacKinnon ordered the lockout to end just over 16 hours after it began because government officials could not bear to see the economic disaster unfold if the railways remained closed.
MacKinnon noted the board’s decision in a post on social media platform X and said he hopes the railroad and its employees can resume operations as soon as possible.
Businesses across Canada and the United States say they will soon face a crisis without rail service as they rely on freight rail to deliver raw materials and finished products. Without regular deliveries, many businesses may have to reduce production or even shut down.
Canadian National Railways began running again on Friday morning, but unions threatened to strike there starting Monday morning. Saturday’s order canceled the strike threat. CPKC workers have been on strike since the lockout started early Thursday, and the railway remains idle.
“While CN is disappointed that an agreement could not be reached at the bargaining table, the company is satisfied that this order effectively ends the uncertainty that has had a negative impact on the supply chain for months,” the railway said in a statement. “CN remains focused on moving goods safely, efficiently.”
CPKC officially ended the lockout after Saturday’s decision and asked workers to return on Sunday. But union spokesman Christopher Monette said the workers who had gone on strike would not return to CPKC before Monday’s deadline in the order.
CPKC said it wants “the Canadian economy to move forward as quickly as possible and avoid disruption to the supply chain.”
The railways said it would take several weeks to fully recover as it began shutting down the network more than a week ago, leaving shipments stranded at customer loading docks and at ports across the country.
The previous contract, which expired at the end of last year, will remain in effect while the arbitration process continues, and the board has ordered the union not to disrupt operations further while that happens.
Negotiations at CPKC and CN broke down over issues related to worker schedules and rules in contracts designed to prevent fatigue. Both railroads have proposed changing the compensation system from paying workers according to miles traveled to one based on hours worked.
The railways said doing so would make it easier to provide predictable timetables, but unions dismissed concerns that the change could undermine vital fatigue protections and jeopardize job security.
Canadian National and CPKC have said they are offering increases in line with other new rail industry deals. CN said engineers earn CA$150,000 a year, while conductors earn CA$121,000. CPKC said that the salary is commensurate.
At CN there is also controversy over efforts to expand the system to move workers to other areas when there is a shortage of staff. The union doesn’t want CN to have the power to harass families, but the railroad says the system is voluntary and already in place in some places.
At the same time Canadian railroads have struggled to reach an agreement with unions, major U.S. railroads have struck deals in recent days.
CSX announced its first bid on Wednesday — a month before the current contract expires and before the start of the traditional national bargaining process that typically drags on for years — and then announced seven more contracts on Friday. All together, the new contracts cover more than half of the railroad workforce. Norfolk Southern and BNSF followed suit, announcing four deals each with some of the 13 unions on Friday.
The deal would help the U.S. rail industry avoid the kind of difficult labor disputes that led to strikes two years ago before Congress and President Joe Biden stepped in to enforce the contract.
