Both of Canada’s major freight railroads stopped operations due to a contract dispute with their workers. Economists are warning that this shutdown could have significant economic consequences for both Canada and the U.S. if the trains do not resume running soon.
Canadian National and CPKC railroads locked out their employees after contract negotiations failed to reach an agreement by midnight on Thursday, Aug. 22.
The unionized workers include about 10,000 engineers, conductors and dispatchers.
As a result of the dispute, all rail traffic in Canada and shipments crossing the U.S. border have stopped.
The disruption affects more than just goods. Over 30,000 commuters in Vancouver, Toronto and Montreal will need to find alternative transportation due to the lockout.
While train operations stopped in Canada, the railroads continue to run in the U.S. and Mexico. However, goods loaded in Canada destined for the U.S. are at a standstill.
If the lockout continues for an extended period, both Canada and the U.S. may experience significant repercussions. Rail lines transport billions of dollars of goods between the two countries every month.
Despite calls from business groups for government intervention, Prime Minister Justin Trudeau has not yet imposed arbitration.
Canadian National said it is still awaiting a response from the workers’ union to its final offer made just before the lockout. CPKC reported that the union rejected its last offer.
Both railroads have stated they will end the lockout if the union agrees to binding arbitration. Negotiations have been ongoing for nine months with Canadian National and for a year with CPKC.
The U.S. narrowly avoided a rail strike two years ago when the government intervened to force workers to accept a contract. Now, a new potential disruption looms, involving port workers along the East Coast.
85,000 unionized port workers could strike in less than 60 days if their contract demands are not met.
