Canada’s federal government ordered its two largest railways to enter binding arbitration with its workers’ union, swiftly ending a shutdown that business groups warned would have “devastating” economic consequences across North America.
Labour minister Steven MacKinnon said on Thursday that Canadian National and Canadian Pacific Kansas City will resume operations “within days” and directed the railways to enter binding arbitration with the Teamsters Canada union. The company locked out its workers on Thursday morning after the parties failed to resolve their contract stand-off. Officials gave negotiations “every chance to succeed”, but saw “little prospect” that the parties would ever agree, MacKinnon said.
This decision was made after it became clear that negotiations were unlikely to succeed without intervention. The government aims to have trains running again within days, as prolonged disruptions could severely impact industries reliant on rail transport, including agriculture, automotive, and energy sectors.
The shutdown has already affected shipments of key commodities such as grain, potash, and coal, and has disrupted commuter rail services in major cities like Toronto, Vancouver, and Montreal. The economic impact of the stoppage could be significant, with estimates suggesting that even a short-term shutdown could cause hundreds of millions of dollars in economic damage.
The decision to move to binding arbitration has been met with opposition from the New Democratic Party, which traditionally supports unions and criticized the government’s approach as favoring corporate interests. However, the government deemed it necessary to prevent further economic fallout and ensure the stability of North American supply chains.