Teamsters Vow Action, but It's Back to Work on the Canadian Rails

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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--Trains are back moving full speed ahead across Canadian territory after federal action ended a labor strike, though union organizers said they still plan to appeal the intervention.

More than half of all goods move on the Canadian rail system, and officials had expressed concern that a widespread strike would hobble the economy and spoil the nation's reputation as a global trading partner.

Federal action last week put a pause on strike action from some 10,000 workers at Canadian National Railways (NYSE:CNI) (CN) (Montral, Quebec) and Canadian Pacific Kansas City (NYSE:CP) (CPKC) (Calgary, Alberta), but Teamsters Canada Rail Conference filed notice of further labor action after the federal government intervened.

On Saturday, the Teamsters labor union in Canada resigned that it would follow orders from the Canada Industrial Relations Board (CIRB) and call on its members to return to work. Union President Paul Boucher added, however, that labor negotiators planned to appeal.

"This decision by the CIRB sets a dangerous precedent," he said. "It signals to corporate Canada that large companies need only stop their operations for a few hours, inflict short-term economic pain, and the federal government will step in to break a union."

Similar sentiment was expressed by opposition leaders concerned that the administration of Prime Minister Justin Trudeau was catering to business interests first. But Matt Jones, the trade minister for oil- and gas-rich Alberta, said that protracted negotiations would come as a detriment to the greater public.

"Going forward, we encourage the federal government to continue to respond quickly to labor disputes that have the potential to create widespread damage to Canadians, our country's economy and our reputation as a reliable trading partner," he said.

Intermodal freight volumes on the Canadian rail network were higher relative to year-ago levels, though labor action last year at the western ports of Canada skew the data. Fuels and chemical volumes during the first quarter were up 4% sequentially, though agriculture volumes declined by 10% due to a smaller crop.

Coal volumes were down as well as production faltered. Rail volumes for oil and gas are down from pre-pandemic levels. That said, Canadian export options for fossil fuels have increased due to new pipelines and liquefied natural gas terminals on the Pacific Coast. Gross domestic product in the Canadian economy expanded by 0.7% during the three months ending in March, with much of the gains coming from educational services.

The Railway Association of Canada said in a quarterly report that expansion was supported by an end to a workers' strike in Quebec last year. The trade association said Canadian supply chains were fluid, with dwell times on the rail network down 6% from first-quarter 2023 levels.

"The smooth performance (as of mid-June) of Canadian supply chains is at risk, however, if a work stoppage in the rail sector were to occur," it foreshadowed.

Stock values on the Toronto exchange were up about 1% in pre-market trading on Monday. Western Canadian Select, the nation's crude oil benchmark, was up 3% to trade near $62 per barrel.

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