As CP Rail’s trains ground to a halt nationwide and thousands of workers began to picket lines, the expected strike at Canada’s second-largest rail operator came at one of the worst times for the country’s economy, experts say.
“The blow this can inflict on Canada’s economy is so damaging,” Richard Powers, an associate professor at the University of Toronto’s Rotman School of Management, told Global News. “I don’t know what else is in store for us without seeing a real breakdown.”
The strike, which involved nearly 3,000 engineers, conductors and other train workers, came into effect early Sunday morning following a lockout initiated by the Calgary-based railroad.
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CP Rail’s strike begins after workers were locked out by employers, threatening supply chains
Following the lockout, the Teamsters Canada Rail Conference said workers were also on strike and picketing was underway at various locations in the Canadian Pacific. According to CP Rail, this is the fifth walkout since 1993.
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There are 26 outstanding issues, including wages, benefits and pensions, which are currently causing turmoil between the two sides. While both parties are still at the table with federal mediators, significant negotiations are still planned. Powers doesn’t see the conflict over until Friday.
“It seems that there are still many issues to be discussed and agreed. A strike at this point only adds to confusion and chaos,” Powers said, noting that the clash came after the COVID-19 pandemic and Russia’s invasion of Ukraine, which is already drastically affecting the economy, not only in Germany have canada but around the world.
For Canadians, everything from farm and agricultural products to fuel and vehicles will be affected, according to Powers.
“The movement of parts is so important, and now you’ve just cut that off,” he said.
1:32Reactions pour in from the prairies as a potential CP Rail lockout draws near
Reactions pour in from the prairies as a potential CP Rail lockout draws near
According to Dennis Darby, president of the trade association Canadian Manufacturers and Exporters, a survey conducted between February 8 and 28 found that nine out of ten Canadian manufacturers are facing supply chain issues.
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He said Canadian manufacturers have already lost an estimated $10.5 billion in sales due to disruptions to the transportation network and simply cannot afford another disruption.
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“Adding to our concern is the fact that a work stoppage at CP Rail will deal another blow to Canada’s reputation as a good place to do business and a reliable partner in the supply chain,” Darby said.
The grain industry in particular is expected to feel the effects of the strike.
“We have those waiting for harvest off the west coast, operators of feedlots waiting for produce, processors on the prairies and eastern Canada that need canola and grain to get bread on store shelves. And we’re seeing inflation picking up,” Western Grain Elevator Association spokesman Wade Sobkowich said last week.
“Everything comes at us at once. There are some things we can control and some things we cannot. We should be able to control a work stoppage, and yet here we are. This is the last thing we need in the grain sector and as an economy here in Canada right now.”
Sobkowich said about half of the annual grain harvest is exported on CP rail lines. He said the average crop size is between 30 and 40 million tons.
The beef industry could also be affected, as CP Rail imports corn into the country to feed livestock, Opher Baron, a professor and academic director at the University of Toronto’s Rotman School of Business, told Global News.
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“They essentially feed the beef industry in Canada,” he said, noting that much of the country’s ground transportation is done by rail.
Baron says Canadians could pay more to buy groceries, clothes and more depending on how long the strike lasts.
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Grain transporters are sounding the alarm over concerns over a possible CP rail strike
“This strike is no small pool. It might be a big one. It can have a pretty big impact,” he said.
Even in the United States, the CP rail conflict has disrupted the movement of fertilizers and other supplies in and out of the country.
Covering much of the US Midwest, Canadian Pacific is a major shipper of potash and agricultural fertilizers. It also transports grain from the US to its northern neighbor for domestic consumption and export. The railroad serves the states of Dakotas, Minnesota, Iowa, Illinois, Wisconsin, Missouri and other states, according to a map on its investor website.
Canadian Pacific also operates in New England and upstate New York, CP spokesman Patrick Waldron said.
CP generated 29 percent of its 2020 freight revenue from cross-border shipments between the U.S. and Canada, according to the investors’ website.
Locked-out workers picket outside the Canadian Pacific Railway headquarters in Calgary, Alta, Sunday, March 20, 2022.
THE CANADIAN PRESS/Jeff McIntosh
According to Powers, the federal government “needs to review labor legislation” to boost Canada’s economy. However, he added that this type of measure is rarely used in Canada as it is an affront to the collective bargaining process.
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“We have to respect the process. Let’s give them a chance. But at the same time, they have to realize that things have to change at some point,” he said.
– With files from Sean Boynton, Connor O’Donovan and The Canadian Press from Global News
© 2022 Global News, a division of Corus Entertainment Inc.
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