Canada’s rail networks hit with a back-to-work order, union plans to strike back

The lockout lasted 16 hours.

The Canadian arbitrator appointed to resolve a messy railroad labor dispute to protect the North American economy has ordered employees at the country’s two major railroads back to work so both can resume operating.

Saturday’s order means Canadian National will be able to continue operating the trains it restarted Friday morning just over a day after it locked out workers. But Canadian Pacific Kansas City likely won’t be able to restart its operations before 12:01 a.m. Monday, when workers were ordered to return.

Railroads play a crucial role in the economy with CPKC and CN delivering more than CA$1 billion (US$730 million) worth of shipments a day and carrying billions of dollars of goods between the U.S. and Canada every month. Even though both companies’ trains in the United States and Mexico continued operating, the lockouts caused a significant disruption. A number of smaller short-line freight railroads that handle local deliveries continued operating across Canada but were unable to hand off shipments to either of the major railroads while they were idle.

The Teamsters union representing workers said that it will comply with the Canada Industrial Relations Board order and send its members back on the job, but it will also move forward with a legal challenge of the arbitration order.

“This decision by the CIRB sets a dangerous precedent. It signals to corporate Canada that large companies need only stop their operations for a few hours, inflict short-term economic pain, and the federal government will step in to break a union,” said Paul Boucher, President of the Teamsters Canada Rail Conference, which represents more than 9,000 engineers, conductors and dispatchers at both railroads.

“The rights of Canadian workers have been significantly diminished today,” Boucher added.

Labour Minister Steven MacKinnon order the lockouts to end just over 16 hours after they began because government officials couldn’t bear to watch the economic disaster unfold if the railroads remained shut down.

MacKinnon noted the board’s decision in a post on the social platform X and said he expects the railroads and employees to resume operations as soon as possible.

Businesses all across Canada and the United States said they would quickly face a crisis without rail service because they rely on freight railroads to deliver their raw materials and finished products. Without regular deliveries, many businesses would possibly have to cut production or even shut down.

Canadian National trains started running again Friday morning but the union threatened to go on strike there starting Monday morning. Saturday’s order nullifies that strike threat. CPKC workers have been on strike since the lockout began early Thursday, and the railroad’s trains have remained idle.

“While CN is disappointed an agreement could not be reached at the bargaining table, the company is satisfied that this order effectively ends the unpredictability that has been negatively impacting supply chains for months,” the railroad said in a statement. “CN remains focused on safely getting goods moving again, as efficiently as possible.”

CPKC officially ended its lockout after Saturday’s decision and asked workers to return for the day shift Sunday. But union spokesman Christopher Monette said workers who have been on strike won’t be going back to CPKC before the Monday deadline in the order.

CPKC said it wants to “get the Canadian economy moving again as quickly as possible and avoid further disruption to supply chains.”

The railroads said it could take several weeks to fully recover because they began gradually shutting down their networks more than a week ago, leaving shipments stranded on customer loading docks and at ports across the country.

The previous contract, which expired at the end of last year, will remain in force while the arbitration process proceeds, and the board ordered the unions not to disrupt operations further while that unfolds.

The negotiations at CPKC and CN broke down over issues related to how workers are scheduled and rules in the contract that are designed to prevent fatigue. Both railroads had proposed changing the compensation system from paying workers according to miles traveled to one based on hours worked.

The railroads said doing that would make it easier to provide predictable time off, but the union resisted over worries that the changes could erode important fatigue protections and jeopardize job safety.

Canadian National and CPKC have said they offered raises in line with other recent rail industry deals. CN said its engineers make about CA$150,000 a year, while its conductors earn CA$121,000. CPKC said its pay is comparable.

At CN there was also a dispute over its effort to expand its system of temporarily relocating workers to other regions when there are staff shortages. The union didn’t want CN to have the power to disrupt families, but the railroad said the system is voluntary and is already in place in some places.

At the same time that the Canadian railroads have been struggling to reach agreements with their union, major U.S. railroads have made a flurry of deals in recent days.

CSX announced the first deals on Wednesday — months before the current contract expires and before the start of the traditional national bargaining process that typically drags on for years — then announced seven more contracts Friday. All together, the new contracts cover more than half the railroad’s workforce. Norfolk Southern and BNSF followed suit, announcing four deals each with some of their 13 unions on Friday.

The deals will help the U.S. rail industry avoid the kind of difficult labor dispute that drove it to the brink of a strike two years ago before Congress and President Joe Biden stepped in to impose a contract.