Canada’s two major railroads are in a standoff as union negotiations stall just days before the Aug. 22 deadline to reach a labor agreement.

On Aug. 18, the union representing about 10,000 rail works at Canadian National Railway (CN) and Canadian Pacific Kansas City (CPKC) issued a 72-hour notice indicating they intend to lock out workers on Thursday unless an agreement is reached for improved wages and safety, among other requests. Negotiations are still ongoing.

A strike at both railroads simultaneously would be the first of its kind, as the labor contracts between the two have historically expired a year apart. This year, that schedule was disrupted because in 2022 CN requested an extension of a previous deal rather than negotiate a new one, Reuters reported.

Impacts of a Canadian Rail Strike

While both railroads have said trains in the U.S. (and Mexico in the case of CPKC) network will operate normally, a work stoppage on the Canadian side would lead to shipment disruption of manufactured goods and commodities, such a petroleum product, into the U.S.

The Chemistry Industry Association of Canada (CIAC) said most of the plastics and chemical companies it represents would have to shut down within a week of a work stoppage, and others within two days. Some, which produce and transport highly regulated goods, have already begun shutdown procedures.

“The Canadian chemistry sector alone moves over 500 rail cars per day. It would require over 1,500 road-based tanker trucks to carry the same load,” said CIAC President and CEO Bob Masterson in a Aug. 9 news release. “There is no Plan B due to the lack of availability of such trucks and drivers, the additional costs to move the products over long distances, and the fact that many chemistry products are restricted to movement on rail due to their hazardous nature.”

CN and CPKC have already started to halt certain shipments ahead of the potential strike or lockout next week. Reuters also reported that the rail operators and some of their U.S. competitors have begun to “refuse certain cross-border cargoes” that would rely on CN and CPKC.

The union, Teamsters Canada Rail Conference, represents locomotive engineers, conductors, train and yard workers and rail traffic controllers.

Lead Image Source: CN