/CN Rail strike ends with tentative deal with union, but fallout continues for farmers, miners

CN Rail strike ends with tentative deal with union, but fallout continues for farmers, miners

Canadian National Railway and Teamsters Canada reached a tentative agreement to renew the collective agreement for 3,200 conductors and yard crews, ending a week-long strike that choked the country’s rail capacity at a critical shipping time for farmers.

Employees can return to work as early as Tuesday at 2 p.m., with normal operations resuming Wednesday at 6 a.m., according to statements from CN and the union. The parties have agreed to no further job action during the ratification process, which is expected to take eight weeks.

Details of the agreement will not be revealed until members vote on the deal by secret ballot, but the union previously said the dispute was over long hours and fatigue that led to what it characterized as dangerous working conditions.

The détente came as a relief to farmers, miners and the province of Quebec, which was facing a severe propane shortage. But rail-reliant industries still expect to be rattled by ripple effects as shippers deal with the backlog caused by the work stoppage that left Canada’s largest railway operating at 10 per cent capacity.

Saskatchewan-based Nutrien Ltd., the world’s largest potash producer, will still shut down its mine in Rocanville, Sask. for two weeks starting Dec. 2, temporarily laying off 550 employees leading up to the holiday season.

“Unfortunately, it’s a tough position,” Nutrien spokesman Will Tigley said. “Despite the best efforts that we tried to do to manage the disruption, the strike created significant backlog in our supply chain and resulted in lost export capacity that can’t be immediately recovered.”

CN Rail carries about $250 billion worth of goods annually, including 180,000 barrels a day of oil in September, according to its earnings call.

Handout/Canadian National Railway

The strike will impact Nutrien’s production by 200,000 tonnes, Tigley said, adding its resolution will prevent further slowdowns and is “great news” for farmers and the broader Canadian economy.

The Mining Association of Canada, the largest customer of Canada’s railways, expressed relief at the tentative deal but said it will take at least a week to move the backlog.

“Disruptions in the supply chain, such as those incurred by this strike, damage Canada’s reputation as a reliable trading partner and must be avoided at all costs,” the association said in a statement.

As the strike continued, the federal government faced increasing pressure from industry to force a return to work through binding arbitration or legislation. That would’ve required the new government to recall Parliament earlier than planned, an action it expressed reluctance to take. Meantime, farmers rode tractors to Prime Minister Justin Trudeau’s riding office in Montreal to dump grain at the doorstep.

Farmers carrying corn grain protest the shortage of propane due to the Canadian National Railway strike in front of the Papineau riding office of Canadian Prime Minister Justin Trudeau Monday.

Reuters/Christinne Muschi

Teamsters thanked Trudeau, Labour Minister Filomena Tassi and Transport Minister Marc Garneau for letting the strike play out in the collective bargaining process.

“Previous governments routinely violated workers’ right to strike when it came to the rail industry. This government remained calm and focused on helping parties reach an agreement, and it worked,” Teamsters Canada president François Laporte said in a statement.

In a joint statement, Garneau and Tassi lauded the negotiation process and mediators from the Federal Mediation and Concillation Service.

“These agreements are further evidence that when employers and organized labour work together, we get the best results for Canadians and for our economy.”

Still, the strike added to a tough year for the agricultural sector, already hit by bad weather and trade conflicts. The tentative deal eases pressure on grain farmers across the country that rely on rail to move crops to market and deliver the propane needed to fuel grain dryers and heat livestock barns.

“Now things can get somewhat back to normal,” said Markus Haerle, chairman of the Grain Farmers of Ontario.

The strike hit during peak shipping season for grain farmers like Haerle and during the closing days of an exceptionally difficult harvest, when wet conditions and heavy snowfall had left much of their crop still in the fields. With no propane to dry the grains and no railcars to move them, many farmers opted to stop harvesting rather than risk letting their crop rot in bins.

Railcars sit idle at Canadian National Railway’s Brampton terminal on Nov. 19, 2019.

Mark Blinch/Reuters files

“By the time we get things going again we will have gone two to three weeks without regular service,” said Haerle. “That’s going to matter.”

Indeed, bringing CN back to full service quickly will be critical to making up as much of that lost time as possible, said Tom Steve, general manager of the Alberta Wheat Commission.

“I think it typically takes a while to restore a system that large and we know there are a lot of railcars sitting loaded through the country that will need to be cleared first before new loads can move,” he said. “Grain moves 52 weeks a year, so any interruption has an impact. It’s a little early to tell what the total cost will be there will undoubtedly be one.”

There will be a lot of people harvesting in January. How you put a price on that I don’t know

Keir Miller, chairman of the New Brunswick Grain Commission

At this time of year, CN typically devotes about 5,600 rail cars per week to moving grains. And some 35 vessels are currently waiting for grain shipments in the Port of Vancouver. Charges for late deliveries to those ships are ultimately passed down to the farmer, Steve said.

Keir Miller, chairman of the New Brunswick Grain Commission, said propane deliveries to farmers, which were curtailed Sunday, were unlikely to resume until the weekend.

“We were already two weeks behind where we should have been and this puts us another week behind,” he said. “So there will be a lot of people harvesting in January. How you put a price on that I don’t know.”

Financial Post

• Email: [email protected] | Twitter:

• Email: [email protected] | Twitter:

Original Source