'It is so critical to the economy': Industry leaders urge Trudeau to end CN Rail strike

Date: Wednesday, November 20, 2019
Source: CBC

Some industrial facilities have already shut down because of the work stoppage

Pressure is mounting on the federal government to reconvene Parliament ahead of schedule and put a stop to the CN Rail strike, as industry groups tally up potential losses resulting from the work stoppage and raise concerns about the harm caused to the country's reputation abroad.

About 3,200 conductors, trainpersons and yard workers walked off the job on Tuesday after negotiations on a new contract with the railway were unsuccessful.

The workers, who have been without a contract since July 23, say they're concerned about long hours, fatigue and what they consider dangerous working conditions.

Talks continue between CN Rail and Teamsters Canada Rail Conference, although the impact is already being felt by many industries that rely on rail service.

Leaders from a variety of sectors, such as agriculture and manufacturing, are urging the federal government to bring in back-to-work legislation.

Some chemical facilities began shutting down their operations as early as Friday in advance of the work stoppage, and the larger companies are losing more than $1 million per day because of the strike, according to the Chemistry Industry Association of Canada.

"This is very significant," said association president Bob Masterson in an interview. 

The chemical industry provides supplies to other industries such as the mining, forestry and automotive sectors. Chemicals are also used by many cities to provide clean drinking water and to treat sewage.

Most chemical production facilities are unable to store more than a few days' worth of their products, which is why many had to halt production so soon.

There have been too many disruptions in rail service in the last decade, according to Masterson, because of other work stoppages and poor winter weather.

"This has to be resolved in a very timely manner," said Masterson, about the CN Rail strike. "Canada is earning a very poor reputation in its ability to serve the global market, and this isn't helping."

The strike is yet another headache for farmers who've already experienced a challenging year described by several as the "harvest from hell" because of weather ranging from excess moisture to drought.

The various trade wars have also hurt commodity prices.

"We haven't had a good year overall in farming, and this just compounds what the issues have been," said Dave Bishop, who has a 3,500-acre farm near Lethbridge and serves as chair of Alberta Barley.

The timing of the strike couldn't be worse, said Bishop, coming during the tail end of the harvest when farmers are trying to sell their crops.

"We move quite a bit of product to the elevator, and if the elevator can't take our product, then we don't get paid. It's a snowball effect and if we don't get paid, it's not good for all of agriculture and rural communities," he said.

The disruption impacts a broad range of industries and could affect the availability of some products on store shelves at retailers across the country, depending on how long it continues.

The oil industry is closely watching the situation at CN Rail, since 60 per cent of crude-by-rail exports in Canada are transported by the Montreal-based company. Similar to when there is a disruption on a pipeline, the repercussions may be minimal if the strike only lasts a few days.

However, if it persists a few weeks, prices could fall as oil begins to back up in Alberta.

"If they get this thing settled within the next five to seven days, the impact should be pretty minimal," said Martin King, a senior commodities analyst with RBN Energy.

"If it starts dragging on beyond a week or 10 days, you'll start to notice more of an impact," he said.

Some companies will be affected more than others. For instance, Cenovus signed a three-year deal with CN Rail in late 2018 to ship about 100,000 barrels per day of oil to the U.S. Gulf Coast.

"We're monitoring the situation and understand that CN and the union continue to negotiate with the assistance of federal mediators," said Cenovus spokesperson Reg Curren in an email. 

"We're working to mitigate impacts through other transportation options."

Parliament is scheduled to return on Dec. 5, which is likely too long a wait for politicians to end the work stoppage, according to Barry Prentice, a transportation economist at the University of Manitoba.

"That would be almost two weeks' time, and that would be pretty damaging," he said in an interview.

The strike will have the most impact in Western Canada, he said, considering its resource base such as mining, agriculture and oil. There will be a ripple effect to the trucking and marine shipping industries, too.

"The past history of the last 10 years has shown the government has not tolerated long rail strikes, and they really can't because it is so critical to the economy as well as to our reputation abroad as a supplier," Prentice said.

The company carries about $250 billion worth of goods annually.

Petroleum and chemicals account for 20 per cent of CN Rail's total revenue, followed by grain and fertilizer with 16 per cent and forest products with 13 per cent.

Conservative Leader Andrew Scheer is urging Prime Minister Justin Trudeau to immediately recall Parliament to enact emergency legislation and resume operations at CN Rail.

Labour Minister Patty Hajdu said the government is concerned about the impact of a work stoppage on Canadians, but remains hopeful the two sides will reach an agreement.

"We are monitoring the situation closely," she said.

 

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