Canadian Rail Network Shuts Down Amid Labor Dispute

Canadian National Railway and Canadian Pacific Kansas City announced a lockout of their Canadian workers following unsuccessful labor talks. The action, backed by the Teamsters union, threatens significant economic disruption and cross-border trade impacts. Industry groups have urged federal intervention to prevent a catastrophic rail stoppage.

Canadian National Railway (CN) and Canadian Pacific Kansas City (CPKC) announced on Thursday the lockout of their Canadian workers after labor negotiations failed, effectively shutting down their rail networks in Canada.

The Teamsters union, representing nearly 10,000 workers at both companies, confirmed the decision, which sets the stage for an unprecedented rail stoppage with potentially devastating effects on the Canadian economy and cross-border trade with the United States. Canada, the world's second-largest country by area, heavily depends on railways for the transport of goods. The shutdown is expected to cripple shipments of grain, potash, and coal, while significantly slowing the transport of petroleum products, chemicals, and automobiles.

Industry groups have called on Prime Minister Justin Trudeau's Liberal government to intervene, noting that Canadian railways move approximately C$380 billion ($277 billion) worth of goods annually. U.S. railroad Union Pacific warned that the stoppage would halt the movement of 2,500 rail cars across the border each day.

The highly integrated Canadian and U.S. economies rely on rail transport for 14% of their bilateral trade, which totaled $382.4 billion for the first half of the year, according to the U.S. Department of Transportation. The stoppage follows months of contentious talks, with both sides blaming each other for the breakdown in negotiations.

In its demand for improved conditions concerning fatigue, rest, and scheduling, the union argues that worker safety is at stake. CN claimed it offered better wages and schedules with reduced workdays per month, but stated the union did not respond.

CPKC indicated that reaching a negotiated agreement with the Teamsters Canada Rail Conference union was not feasible. The companies said they made final offers to avoid the stoppage and urged the union to return to negotiations.

The Teamsters, however, accused both companies of not seriously considering their multiple offers and expressed their commitment to continue bargaining.

(With inputs from agencies.)