CN Rail strike could cost Canadian economy billions: TD Bank
MONTREAL -- With tensions rising and no end in sight, the federal government urged Canadian National Railway Co. and its striking workers to continue talks in what Ottawa views as the fastest way to resolve a dispute that has stopped freight trains across the country.
"The most probable and the quickest way to solve this is through collective bargaining," federal Transport Minister Marc Garneau told reporters Friday.
"We are making both sides very, very aware of the impacts this is having on Canadians. Canadians are not only inconvenienced but, in some cases, pretty stressed by this," he said. "We are encouraging both sides to keep talking."
The strike at the country's biggest railway entered its fourth day as round-the-clock negotiations continue under the watch of federal mediators while rhetoric ratchets up.
The Teamsters union claims Quebec's propane shortage "appears to be largely manufactured" by CN Rail amid rising pressure from industry and premiers to reconvene Parliament ahead of schedule and pass back-to-work legislation. The union framed CN's move to transport freight other than propane as "a business decision."
The Montreal-based railway told The Canadian Press it has "a small pool of qualified managers" that allows it to operate at about 10 per cent capacity. "Currently, very limited amounts of various commodities are moving across the country," spokesman Jonathan Abecassis said in an email.
Premier Francois Legault said Thursday the province is facing an "emergency" as it is days away from running out of propane, which heats hospitals and nursing homes and fuels operations in agriculture and mining.
CN Rail rejected the union's claim that the strike concerns workplace health and safety, suggesting instead that it revolves around worker compensation.
"While the current average salary of a Canadian conductor is $114,000 plus benefits, including a defined benefits pension plan, the union is seeking wage and benefit improvements beyond those negotiated this year with Unifor and another bargaining unit of the TCRC," CN said in a release.
Union spokesman Christopher Monette said in an interview that the Teamsters Canada Rail Conference is not prepared "to set aside all of our safety concerns and start transporting propane so that a fatigued worker ends up making a mistake and there's a derailment in a populated area."
The railway is calling on the union to enter into binding arbitration, with an arbitrator chosen by the parties or appointed by the federal government.
A prolonged disruption to CN Rail -- a critical artery for imported consumer goods and a key export channel for commodities ranging from grain to fertilizer and forestry products -- could dent gross domestic product growth.
The strike could cost the Canadian economy up to $2.2 billion if it lasts through the end of the month, and up to $3.1 billion if it continues until Dec. 5 -- when Parliament is scheduled to resume -- according to TD senior economist Brian DePratto.
A nine-day strike at Canadian Pacific Railway Ltd. in 2012 drove a nearly seven per cent drop in the goods sector that month, DePratto said. Federal back-to-work legislation ended the labour stoppage, one of three at CP Rail in the past seven years.
"Should this strike drag on, it would clearly be disruptive to the Canadian economy and to the company in question," said Avery Shenfeld, chief economist at CIBC Capital Markets.
"An extended strike risks seeing a near flattening in economic activity to finish the year," he said in an email, noting fourth-quarter GDP growth had been expected to hit one per cent.
Nearly two-thirds of propane travels along the tracks at some point -- in Quebec, about 85 per cent arrives by rail, the bulk of it from refineries in Sarnia, Ont., and some from Edmonton -- with the rest shipped by truck, according to the Canadian Propane Association.
CN has confirmed it will try to deliver the propane now sitting in 69 tanker cars around Quebec to desired destinations if the province requests it, Garneau said.
Parts of Ontario and Atlantic Canada could also face propane shortages as truckers reportedly idled in lines of more than six hours in Sarnia this week
The chorus of premiers and industries calling for swift action grew louder Friday, increasing pressure on Prime Minister Justin Trudeau's new cabinet.
Alberta Premier Jason Kenney said Friday he wants the rail strike resolved "as soon as possible," following up on his energy minister's call earlier this week for an immediate return of the House of Commons to pass a back-to-work bill for CN conductors, trainpersons and yard workers.
Ontario Premier Doug Ford stood by Trudeau's faith in continued talks, saying that back-to-work legislation "doesn't happen right away."
"I take the prime minister at his word that he's going to continue working hard at bringing both sides together, the Teamsters and CN, and get the trains moving again, as they say."
Fertilizer Canada called on Ottawa to take "decisive action," warning that up to $300 million in shipments would be impacted if the strike continues until Dec. 5. The Canadian Federation of Independent Business reiterated the "threat for small businesses" posed by the strike, particularly farmers.
With more than 90 per cent of grain moved by rail, the work stoppage has triggered worries among grain elevator operators and farmers -- who also use propane to dry grain and heat barns and greenhouses -- about lost sales and contract penalties following a wet harvest.
Farmers from Quebec's Monteregie region staged a protest outside the offices of local Liberal MP Brenda Shanahan Friday morning demanding authorities find a way to resume propane shipments to the province.
As of Sept. 30, CN had shipped in 2019 some $11.33 billion in total freight along its 22,000 kilometres of track, which stretches from Vancouver to Halifax to the U.S. Gulf Coast.