Rail companies start to halt certain shipments as lockout threat looms

CN rail trains are shown at the CN MacMillan Yard in Vaughan, Ont., on Monday, June 20, 2022. (Nathan Denette/The Canadian Press)

The country's two main railways have started to halt shipments ahead of a possible strike or lockout next week, the first stage in a wind-down as the bargaining deadline approaches.

Canadian National Railway Co. said in an internal memo obtained by The Canadian Press that the company began to embargo hazardous goods from the U.S. on Monday in anticipation of a work stoppage.

The cargo includes chlorine to disinfect drinking water and ammonia for fertilizers, as well as other toxic or poisonous substances and explosive materials.

"In the absence of reaching a timely tentative agreement or referring all outstanding matters to binding arbitration before the threat of a labour disruption, additional commodities will be subject to embargo," stated the company-wide message from CN's bargaining team on Tuesday.

On Friday, Canadian Pacific Kansas City Ltd. said it will temporarily ban traffic of dangerous materials to ensure none wind up stranded on the tracks in the event of job action.

The two railways warned last week they will lock out 9,300 engineers, conductors and yard workers on Aug. 22 unless they find common ground on new contracts after negotiations stalled over scheduling and wages.

Shippers say a work stoppage would snarl the country's supply chain, halting freight traffic and disrupting industries.

Goods critical for public health as well as agriculture, mining and forestry are typically among those subject to initial embargoes, said Bob Masterson, CEO of the Chemistry Industry Association of Canada.

"When you talk about public safety, those are the volumes that are going to disappear first," he said, highlighting chlorine for municipal drinking water.

"Usually they'd have a week's worth of supply and it's being refreshed on an ongoing basis. If we don't get there for a week and then there's the work stoppage ... you're going start to feel some pains."

\Members of the industry group, composed of producers of plastics and chemicals, rely on rail transport for 80 per cent of the sector's $100 billion in annual shipments.

\"The consequences of not getting a negotiated settlement are severe," Masterson said.

\The railways' lockout warnings to the Teamsters Canada Rail Conference last Friday came hours after the national labour board ruled that a work stoppage would pose no "serious danger" to public health or safety, opening the gate to a full-fledged strike or lockout. If either occurs, employees at CN or CPKC would not be compelled to continue hauling goods.

\The labour tribunal ordered a 13-day cooling-off period as part of the dual decisions Friday morning, leaving Aug. 22 as the earliest possible date for a strike or lockout.

- This report by The Canadian Press was first published in French on Aug. 13, 2024.