PEORIA, Ill. — As of the Farm World press deadline the rail labor negotiations impasse that brought Canada’s freight rail system to a complete halt last week had still not been resolved. Canada’s rail networks remained in turmoil even after government intervention to resolve the rail company lockout, which was sparked by workers’ complaints of crew scheduling, rail safety and worker fatigue. 

Negotiations between the workers and rail companies have been going on since last November. Worker contracts expired at the end of 2023, and were extended as talks continued. Negotiations took on a greater urgency last week when the Canadian Pacific Kansas City (CPKC) and Canadian National railroads halted the delivery of shipments of certain hazardous materials, including agricultural bulk commodities and crop fertilizers used by U.S. farmers. This led to the lockout of around 10,000 union rail engineers, conductors and dispatchers. 

On August 22, less than a day after the lockout, Canada’s Minister of Labor directed the Canada Industrial Relations Board (CIRB) to impose final binding arbitration and have the Teamsters Canada Rail Conference (TCRC) complete new deals with two railroads involved in the walkout. In response, CNR lifted its lockout of around 6,500 workers, prompting them to submit a 72-hour strike notice on Friday morning, according to a statement from the TCRC. At the same time, CPKC’s lockout of workers continued pending an order from the CIRB.

“Despite the Labor Minister’s referral, there is no clear indication that the CIRB will actually order an end to the labor dispute at CPKC,” the union representing CPKC workers noted in an August 23 statement. 

The two railroads handle about 40,000 carloads of freight each day, worth about $1 billion, including shipments of automobiles and auto parts, chemicals, forestry products and agricultural goods, the Associated Press (AP) reported. Fertilizer, wheat and bulk commodities rely on rail for the majority of shipments. Agricultural and other industry groups had called on Canada’s government to take action, warning of the potential for billions of dollars of economic damage from a prolonged work stoppage.

“Canada is a key source of fertilizer for U.S. farmers,” according to Daniel Munch, an economist for the American Farm Bureau Federation. “More than 85 percent of fertilizer trade between the U.S. and Canada is transported by rail, with the remainder handled by trucking (12 percent) and waterborne vessels (3 percent). Disruptions to railway access between the U.S. and Canada could severely jeopardize farmers’ ability to secure essential inputs critical for crop growth.”

Munch added that a rail stoppage would affect U.S. agriculture exports to Canada, which is the leading destination for U.S. ethanol and barley. 76 percent of U.S. barley exports and 44 percent of ethanol exports were destined for Canada in 2023.

“Canada also ranked as the fourth-largest market for U.S. soybean meal and rice, and the fifth largest for corn,” Munch said. “Interestingly, a portion of these exports is transported to Canada, then moved westward across the country before being re-exported through Pacific Northwest ports on both sides of the border. This complex logistical flow means that a Canadian rail strike could disrupt not only trade with Canada but also with key markets in Asia and Oceania, further amplifying the potential risks and impacts on U.S. agricultural exports.”

Jeff Windau, industrials analyst for Edward Jones & Co., told the AP that his firm expected the work stoppages to last only a few days. “If something would carry on more of a longer term in nature, then I think there are some significant potential issues just given the amount of goods that are handled each day,” he said. “By and large the rails touch pretty much all of the economy.”

 At press time, the rail situation in Canada remained very fluid and uncertain. The TCRC announced they would challenge the constitutionality of the Canadian federal government’s decision to direct the Canada Industrial Relations Board (CIRB) to help settle the negotiations between the parties.  As a result, the union maintained that the work stoppage at CPKC remained in effect and operations would not be resuming at that railroad. 

According to an AP report on Saturday morning, August 24, a government-ordered arbitration hearing on Friday wrapped up without a decision, and Canadian National trains were expected to keep moving at least through Monday morning,  August 26.