Posthaste: CN Rail strike has already disrupted the economy — now it’s taking a toll on jobs
Agriculture, manufacturing and energy, sectors that are already reeling from a mix of trade uncertainty and low prices — are expected to see more pain if the Canadian National Railway workers’ strike drags on.
And it’s already taking a toll on jobs. The Canadian Press reported that the ongoing CN strike has cost scores of Halifax rail workers their jobs — at least for now — as the labour stoppage continues to impact shipping across the country, according to the the union representing the employees.
More than 250 staff at Canadian National Railway Co.’s Autoport terminal, which handles cars shipped in and out of Canada, recently received layoff notices, but CN later rescinded the notices for 180 employees, according to Unifor, CP reported.
The strike is also impacting every aspect of the Canadian economy that relies heavily on trade. TORQ Energy Logistics Ltd. said it won’t be able to get any more crude at its CN-serviced rail terminals once all the empty rail cars are filled up, forcing oil producers to find another place to put their crude, Kent McDougall, chief commercial officer, told Bloomberg on Friday. Altex Energy Ltd. is also in a similar situation with its terminals in Lashburn, Lynton, Unity and Falher.
“Rail transportation may only account for about 0.5% of GDP, but past experience shows that these types of disruptions can be significant enough to impact the national GDP figures,” TD Bank said in a note to clients. “A nine-day labour disruption at CP Rail in 2012, for instance, drove a 6.8% drop in the sector that month – large enough to bear mentioning by Statistics Canada at that time.”
A strike that persists till the first few days of December could cost the Canadian economy as much as $3.1 billion in lost output, TD estimates.
“This disruption comes at a challenging time for the Canadian economy. A 0.2 p.p. impact may not seem like a lot in isolation, but must be considered in context,” TD analysts said. A pre-disruption growth expectation for Q4 of only 1.3 per cent, like the Bank of Canada’s, or TD’s similar tentative 1.4 per cent annualized growth tracking, doesn’t leave a lot of wiggle room for negative shocks, the bank said.
CN rail strike are also impacting supply chains for timber, lumber paper and packaging products. “We estimate that almost 50% of Canadian forestry products is transported by CN rail,” RBC Capital Markets noted.
This is the re-elected government’s first big economic test, but so far the government seems reluctant to force strikers back to work. Agriculture Minister Marie-Claude Bibeau is expected to meet farm leaders and Saskatchewan Agriculture Minister David Marit in Regina today, which may provide some colour on the government’s latest thinking.
Here’s what you need to know this morning:
Gov. Gen. Julie Payette delivers a presentation at the start of a panel discussion on innovation and entrepreneurship in Vilnius, Luthinia
Statistics Canada to release wholesale trade figures for September at 8:30 a.m. ET
The Federal Court holds a hearing in the case of the Attorney General of Canada v. First Nations Child and Family Caring Society of Canada and others
The Association of Manitoba Municipalities holds its annual convention
National Farmers Union national convention in Winnipeg
Agriculture Minister Marie-Claude Bibeau meets with farm leaders, Saskatchewan Agriculture Minister David Marit in Regina
Notable Earnings: Organigram Holdings Inc.
Legal recreational cannabis sales declined across the country in September, with New Brunswick charting one of the largest month-over-month drops, according to the latest data from Statistics Canada released Friday morning.
Approximately $123 million in legal adult-use cannabis was sold across Canada, down 2.4 per cent from $126 million in sales in August, writes Vanmala Subramaniam.