Canada's freight trains will soon roll again after labor lockouts. Here's what to know

TORONTO (AP) — Canada’s two largest railroads are expected to soon start rolling their trains again after the government intervened to end a shutdown that arose from a labor dispute.

After Canadian National and CPKC failed to reach new agreements with the Teamsters Canada Rail Conference union by an overnight deadline early Thursday, both freight railroads locked out their workers — halting all rail traffic in Canada and shipments into the U.S. But, less than a day into the full stop, the Canadian government ordered both freight railroads to enter binding arbitration.

Labour Minister Steven MacKinnon expects trains to be running again within days. Meanwhile, the union representing 10,000 engineers, conductors and dispatchers responded angrily to the order, accusing CN and CBKC of intentionally creating a crisis to force government intervention. Its picket lines remain in place.

Here's what to know.

What led to Thursday's shutdown — and its resolution?

It comes down to a labor-contract dispute and responding government intervention.

CN and CPKC railroads both locked out their employees after a 12:01 a.m. EDT deadline to resolve a dispute with Teamsters Canada Rail Conference passed without agreements. As a result, all of their trains in Canada stopped moving along with shipments crossing through the U.S. border. That posed the potential of significant economic harm to business and consumers across both countries, which rely on billions of dollars of goods running on rails each month.

Throughout the day Thursday, both sides negotiated unsuccessfully while workers picketed outside. Business groups urged the government to force the arbitration.

Prime Minister Justin Trudeau initially declined to force the parties into binding arbitration, for fear of offending unions and the leftist NDP party that his Liberal government relies on for support to remain in power. But the government's approach changed by late afternoon, when MacKinnon announced the decision to order arbitration.

MacKinnon, who had declined arbitration a week ago, said the government wanted to give negotiations every chance to succeed — but ultimately the economic risk was too great to allow the lockouts to continue.

“Collective bargaining is always the best way forward," Trudeau said later in a post on X. "When that is no longer a foreseeable option — when we are facing serious consequences to our supply chains and the workers who depend on it — governments must act."

Both CN and CPKC hailed the decision, saying that the government had no choice. But Teamsters Canada Rail Conference President Paul Boucher strongly criticized the order.

“The two major railways in Canada manufactured this crisis, took the country hostage, and manipulated the government to once again disregard the rights afforded to working-class Canadians," Boucher said, adding that the union is "deeply disappointed by this shameful decision.”

What happens next?

CN said it ended its lockout immediately Thursday evening as part of an effort to get its trains running again as soon as possible. CPKC railroad said in a statement that it will follow the direction of the Canada Industrial Relations Board that is overseeing the arbitration but it didn’t say exactly when it’s lockout will end.

MacKinnon said earlier that he expects the trains will be running within days. Ending the lockouts is the first step.

Teamsters Canada Rail Conference, meanwhile, said picket lines will remain in place while the union reviews the formal arbitration order and decides on next steps.

Most previous Canadian rail stoppages have only lasted a day or two and usually involved only one of the big railroads, but some have stretched as long as eight or nine days. The impact was magnified this time because both railroads had stopped.

Were businesses and travelers impacted?

Billions of dollars of goods move between Canada and the U.S. via rail each month. And while the end of the lockouts may be near, some consumers and businesses were already feeling impacts Thursday.

More than 30,000 commuters in Vancouver, Toronto and Montreal were the first to feel the pain of the lockouts and they may be stuck taking the bus again Friday. Their commuter trains aren’t able to operate while CPKC dispatchers are locked out.

Most businesses probably have enough supplies on hand and room to store finished products to withstand a brief disruption. But ports and other railroads would have quickly become clogged with stranded shipments that CN and CPKC won’t pick up.

Chemical businesses and food distributors would have been the first to be affected. The railroads stopped accepting new shipments of hazardous materials and perishable goods as they began gradually shutting down last week, in anticipation of Thursday's full stop, but most chemical plants had said they would be OK for about a week.

The auto industry was also bracing for potential spot shortages. That’s because General Motors, Stellantis, Ford, Honda and Toyota either assemble whole vehicles in Canada or ship engines and other components across the border. About 80% of vehicles put together in Canada are shipped to the U.S., largely by rail. Michael Robinet, executive director at S&P Global Mobility, explained that most auto assembly plants operate on “just-in-time” inventories of parts — making it difficult to stockpile for more than a couple of weeks.

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Funk reported from Omaha, Nebraska. Associated Press writers Wyatte Grantham-Philips in New York and Tom Krisher in Detroit contributed.