Canada’s two major freight railroads, Canadian National (CN) and Canadian Pacific Kansas City Southern (CPKC), have ceased operations following a lockout of 9,000 Teamsters union members. This unprecedented shutdown is poised to impact both Canadian and U.S. economies significantly, as nearly a third of the freight handled by these railroads crosses the U.S.-Canadian border.
The disruption could affect various U.S. industries, including agriculture, automotive, home building, and energy sectors, depending on the duration of the shutdown. CPKC’s statement emphasized the urgency of resolving the labor dispute to avoid further complications during the crucial fall peak shipping season, which includes the arrival of new grain crops and holiday merchandise.
This is the first simultaneous shutdown of Canada’s major railroads due to a labor dispute. The most recent work stoppage in the rail industry was a 60-hour strike at Canadian Pacific in 2022. Unlike a strike, which involves workers refusing to work, this lockout sees management preventing nearly 9,000 Teamsters from working.
The Teamsters union has criticized the railroads for compromising safety and worker welfare, while the railroads argue that their proposed changes would actually enhance safety. The railroads have requested government intervention to refer the dispute to binding arbitration, a request that has so far been denied by the Canadian government.
Economic analysts predict severe financial losses from the shutdown. A report by Anderson Economic Group estimated that a three-day strike would cause $300 million (407 million Canadian dollars) in damage, with losses exceeding $1 billion (1.4 billion Canadian dollars) for a seven-day disruption. The lack of available trucking capacity further exacerbates the problem.
The shutdown has already led to the suspension of shipments for hazardous materials to prevent further complications. Canadian Prime Minister Justin Trudeau has not yet committed to government intervention but acknowledged the seriousness of the situation, with ongoing efforts by Labor Minister Steve MacKinnon to mediate a resolution.
