Just when we thought Canadian trains couldn’t get any more unreliable, lockouts at the country’s largest railroads ground the network to a halt early yesterday morning.
What happened: Following calls from business groups, the Canadian government stepped in by late afternoon to get the freight rail network and the affected passenger trains on line again. Ottawa ordered Canadian National Railway and Canadian Pacific Kansas City (CPKC) to enter binding arbitration with the Teamsters union, which represents 9,300 rail workers, to resolve the labour dispute.
- But considering the union and railroads remain “far apart” in their talks, we wish the best of luck to the individuals tasked with offering up a solution.
Why it matters: Canada relies heavily on rail transport for trade, sending 75% of its exports to the U.S. mostly over rail. A prolonged stoppage could have led to production shutdowns, inventory stockpiles, and reputational damage. But according to a note by CIBC Economics, even a week-long stoppage would have left a relatively small impact on the economy.
- It was the first railway shutdown in the country’s history that affected both of the major railways, disrupting the flow of over $1 billion worth of goods daily.
Bottom line: Even after the government order, it’s still unclear when exactly the trains will be back up and running again. And without traffic controllers manning CPKC-owned tracks, an estimated 32,000 people across major cities might just have another great excuse for not making it to work today.—SB