Potential rail stoppage in Canada has US businesses worried

A labor dispute north of the U.S. border that could see Canadian rail workers strike as soon as Thursday has U.S. businesses calling for a government intervention.

The U.S. and Canadian chambers of commerce issued a warning about the potential rail stoppage Tuesday, saying it could have a “significant impact” on the U.S. economy.

“The U.S. Chamber of Commerce and Canadian Chamber of Commerce are calling on the Government of Canada to immediately intervene to avert a disruption in the Canadian rail network. A stoppage of rail service will be devastating to Canadian businesses and families and impose significant impacts on the U.S. economy,” the business lobbies said.

U.S. and Canadian rail networks are operationally integrated, and a shutdown on the Canadian side of the border would have an immediate impact on the U.S. side, the U.S. Chamber of Commerce said.

“The Government of Canada must take action to ensure goods continue to move reliably between our two countries,” the group said.

As many as 2,500 Union Pacific Railroad cars headed for the U.S. every day would be stuck north of the border, Union Pacific CEO Jim Vena said in a letter to Canadian Labor Minister Steve MacKinnon, as reported by Reuters.

Canadian Teamsters filed a 72-hour strike notice Sunday to Calgary-based railway company CPKC. Earlier in August, CPKC said it was issuing a lockout notice for Teamster employees that would go into effect Thursday. Canadian National Railway (CN) is also involved in the dispute and issued a similar lockout notice Sunday.

The move to issue lockout notices followed a decision by the Canada Industrial Relations Board that no stopgap services need to be maintained by the company in the event of a railway strike, CPKC said. Teamsters have declined to enter into private arbitration on the matter, CPKC added.

Canadian Teamsters have been fighting for greater transparency around when workers will be called into work, among other contract provisions. 

“CPKC is pressuring the union for concessions that would make it even harder for workers to predict when they might be called for work, creating a fatigue-related safety risk,” the Teamsters said in a statement. “The company is attempting to undermine Canada Labour Code provisions.”

CPKC has described its offer as a “status quo-style contract renewal covering three years with competitive wage increases that are consistent with recent settlements.”

CPKC reported a second-quarter net income of Canadian $903 million. Over the last year, the company has reported $1.7 billion in profits and total revenues of $7.1 billion, according to a company filing.