Canada’s two main railways locked out more than 9,000 unionized workers overnight, halting freight traffic across the country.
The stoppage of both Canadian National Railway (CN) and Canadian Pacific Kansas City (CPKC) had an immediate impact on tens of thousands of commuters and will ripple through the economy.
But how will it affect you? Here are some of your questions answered about the stoppage.
What do workers want?
Negotiations had been ongoing for nine months over wages, benefits and scheduling issues.
The Teamsters union, which represents workers at both railways, says both CN and CPKC are pushing to weaken protections around rest periods and scheduling.
“You’re on call basically 24/7,” Christopher Monette, a spokesperson for Teamsters Canada, told Radio-Canada. “When you get the call, you have two hours to get to work, and you don’t know if you’ll be back that same day, the next day or in two days.”
CN said it has negotiated in good faith to address the demands.
“The company consistently proposed serious offers, with better pay, improved rest and more predictable schedules,” CN said.
CPKC, for its part, called for binding arbitration, saying the union has made “unrealistic demands.”
Why doesn’t the government step in?
Business groups and companies want the federal government to impose binding arbitration on the union and the companies. But so far, it has so far asked the railroads and the union to work together and reach an agreement.
Prime Minister Justin Trudeau suggested Thursday that his government will have an update soon on its plans to find “the right solution” to the historic railway shutdown that’s threatening to upend supply chains.
“We are not taking this lightly because Canadians across the country are worried about it,” he said.
“We will have more to say shortly on what we are doing to make sure the right solution is found quickly for the economy.”
Freight traffic on Canada’s two major railways stopped early Thursday. Prime Minister Justin Trudeau says the federal government is not taking the situation ‘lightly, because Canadians across the country are worried.’
Why isn’t rail an essential service?
Rail service is not considered “essential” — which means it’s not required to remain in operation during a labour dispute — under the Canada Labour Code.
Ahead of the lockout, the Canada Industrial Relations Board (CIRB) was asked to determine if service should be maintained during a labour dispute.
The CIRB said in a May 2024 decision that a work stoppage “would result in inconvenience” and “economic hardship,” but would not present an immediate threat to public safety.
Should I be stocking up on products? Will store shelves be empty?
In short, no, but experts and business groups told CBC News that if the dispute drags on, we could begin to see a shortage on some perishable foods, such as fruit and meat, as well as frozen food.
Trevor Heaver, a retired professor at the University of British Columbia’s Sauder School of Business, said a stoppage could most obviously affect things like the availability of furniture and cars.
But he said there is already a large amount of inventory in Canada for many consumer goods, including food, so there won’t necessarily be an immediate impact.
Rail is “an early part of that supply chain, so the effect of that early part not flowing is delayed,” he said.
“It’s a bit like if you turn off the tap of water into your house, you can still flush the toilet as long as your tank is full and you don’t notice the effect until you’ve used up that inventory in your house.”
John Corey, president the Freight Management Association of Canada, said, “I don’t think anyone is going to starve, but certainly the selection and grocery store is gonna go down.
“If this strike goes on for 10 days or two weeks, we’re in a lot of trouble,” he told CBC Toronto’s Metro Morning.
Will the stoppage drive up prices?
Not likely, economists said.
“I can’t see this work stoppage lasting long enough to have a material impact on inflation,” CIBC chief economist Avery Shenfeld said in an email.
“In terms of a short-lived stoppage, we’re starting from a reasonably well-stocked level of inventories across the economy.”
Jimmy Jean, chief economist for the Desjardins Group, also said it was unlikely to “have a very perceivable impact on overall inflation.”
The major impact “will be the potential for lost sales for businesses and layoffs and lost wages in these areas,” said Fraser Johnson, a professor at Western University’s Ivey Business School who specializes in supply chains.
The effect on sectors such as agriculture and automotive manufacturing are more immediate and potentially damaging.
“Once the strike is on, the daily costs are huge,” he said. “Each day the size of that cost gets greater … because more and more companies that are producing goods get forced to slow down.”
The ratings agency Moody’s estimated the shutdown would cost the Canadian economy up to $341 million a day.
What makes this such a big deal?
Historically, the contracts for workers at the two main railways did not expire at the same time, said Pierre Barrieau, a lecturer at the University of Montreal in transportation planning and president of Gris Orange Consultant.
“We’re now seeing more pressure being exercised by the union,” he said.
There have been five stoppages since 2012. Most recently, in 2022, Canadian Pacific workers hit the picket lines for 60 hours that March before a tentative contract with the company was hammered out. Three years earlier, in 2019, more than 3,000 workers at Canadian National were on strike for eight days before they reached a collective agreement.
Barrieau said history suggests that after a stoppage, “typically, either they’re able to get a solution quickly, or if not, the federal government intervenes.”