OTTAWA, Canada — The Canadian federal government swiftly intervened Thursday to end a labor dispute that had brought two of the country’s largest railways to a standstill, threatening to disrupt supply chains across North America.
Labour Minister Steve McKinnon announced that both sides would be sent to final binding arbitration and directed Canadian National Railway (CN) and Canadian Pacific Kansas City (CPKC) to resume operations immediately.
The railways had locked out nearly 9,300 workers at midnight Wednesday after failing to reach an agreement with the Teamsters union. The dispute threatened to halt the transport of a wide range of goods, from grains and potash to coal and timber, potentially affecting Canada’s crucial exports to the United States.
“Workers, farmers, commuters and businesses rely on Canada’s railways every day, and will continue to do so,” McKinnon said in a statement. “It is the government’s duty and responsibility to ensure industrial peace in this critically vital sector.”
Canada, the world’s second-largest country by area, heavily depends on rail transport for its economy. Approximately 75% of all goods Canada exports to the U.S. are transported by rail.
Under the government’s orders, the Canada Industrial Relations Board will settle disputes over the collective agreements. In the interim, the Board will extend the current terms of the collective agreements to allow workers to resume their duties as soon as possible.
The labor agreements for both railways expired at the end of last year. Negotiations had grown increasingly bitter, with both sides accusing the other of refusing to negotiate seriously, according to reports from CBC.
CN expressed satisfaction with the end of the labor dispute but noted its disappointment that a negotiated deal could not be achieved at the bargaining table. CPKC stated its desire “to protect Canada’s supply chains, and all stakeholders, from further uncertainty and more widespread disruption.”
François Laporte, National President of Teamsters Canada, emphasized that safety was the union’s primary concern. “Across Canada, we have trains carrying goods, energy, and chemicals,” Laporte told the BBC. “We want to make sure that those trains are operated by people who get the proper rest, who are safe, who are not fatigued.”
The Teamsters Canada Rail Conference had previously accused the railways of prioritizing their “bottom line” over worker safety and fair labor practices.
