National rail shutdown begins as employees locked out at both major Canadian railways

In a first for Canada, freight traffic on its two largest railways has simultaneously ground to a halt, threatening to upend supply chains trying to move forward from pandemic-related disruptions and a port strike last year.

In the culmination of months of increasingly bitter negotiations, Canadian National Railway Co. and Canadian Pacific Kansas City Ltd. locked out 9,300 engineers, conductors and yard workers after the parties disagreed on a new contract before the midnight deadline.

The Teamsters Canada Rail Conference has begun posting pictures to social media of workers from Halifax to Vancouver setting up picket lines.

READ: Railroaded: How this labour dispute could shake global food security

The impasse also affects tens of thousands of commuters in Toronto, Montreal and Vancouver, whose lines run on CPKC-owned tracks. Passenger trains cannot run on those rails without the locked-out traffic controllers to dispatch them.

"The rail shutdown at CN and CPKC is already costing workers, transit users and businesses across the country, and we cannot afford to let things get worse," Ontario Premier Doug Ford posted on X on Thursday morning.

GO Transit warned Thursday (August 22) that its service "may be busier than usual." 

The regional transit service for southern Ontario’s Golden Horseshoe region said rail service was suspended at Hamilton GO Centre and on the Milton line, which cuts through Mississauga to Toronto’s downtown Union Station.

In Vancouver, TransLink said the West Coast Express service was suspended, while Exo said its Candiac, Saint-Jérôme and Vaudreuil/Hudson lines in the Montreal area would not be running.

Pressure from industry groups and government to resolve the bargaining impasse has been mounting for weeks, with calls to hash out a resolution likely to ratchet up further now that the work stoppage has begun.

The two rail companies haul a combined $1 billion in goods each day, according to the Railway Association of Canada. Many shipments were pre-emptively stopped to avoid stranding cargo.

READ: Teamsters union serves strike notice to CPKC; CN Rail issues lockout notice

Parties bargained late into the night Wednesday at hotels in Montreal and Calgary before talks broke off shortly before midnight.

Each side has accused the other of failing to negotiate seriously.

"The railroads don't care about farmers, small businesses, supply chains or their own employees. Their sole focus is boosting their bottom line, even if it means jeopardizing the entire economy," said Teamsters president Paul Boucher in a statement early Thursday morning.

Bargaining played out in separate negotiations between each company and the Teamsters, which represents 6,000 CN workers and 3,300 CPKC workers.

The Teamsters has said both companies are pushing to weaken protections around rest periods and scheduling, while CN is also seeking a scheme that would see some employees move to far-flung locations for several months at a time to fill labour gaps.

CN said it has negotiated in good faith over the past nine months.

"The company consistently proposed serious offers, with better pay, improved rest and more predictable schedules. The Teamsters have not shown any urgency or desire to reach a deal that is good for employees, the company and the economy," CN said.

CPKC called for binding arbitration, saying the union has made "unrealistic demands."

Business groups have also demanded the government step in by imposing binding arbitration and barring strikes and lockouts as the process plays out.

Canadian Chamber of Commerce chief executive Perrin Beatty said Ottawa could have prevented the unprecedented shutdown, but it did not act.

"The minister of labour must use the tools at his disposal to immediately resolve this conflict through binding arbitration," Beatty said in a statement Thursday morning.