Market Matters Blog

By Mary Kennedy DTN Cash Grains Analyst And Cliff Jamieson DTN Canadian Grains Analyst

Shortly after midnight on March 20, the Teamsters Canada Rail Conference (TCRC) announced the Canadian Pacific Railway locked the union workers out.

Early March 19, the Canadian Pacific (CP) informed customers that, while it would continue to bargain in good faith with the Teamsters Canada Rail Conference (TCRC) leadership "to achieve a negotiated settlement or enter binding arbitration," the railroad was commencing to execute a safe and structured shutdown of its train operations for traffic moving in and through Canada. This was done in case the negotiations failed.

Under the shutdown, an embargo application for shipments routing to and from CP Canadian locations is now in place to be effective 00:01 Sunday March 20, 2022. This embargo applies to:

- All shipments originating in Canada which are billed to any Canadian or U.S. destinations;

- All shipments originating in the United States which are billed to any Canadian destinations.

In addition, the embargo can be rescinded at any time.

The TCRC reported, "Despite the best efforts of the TCRC Negotiating Committee, a lockout would occur at CP." A lockout is a work stoppage initiated by company management during a labor dispute. Unlike a strike, in which employees refuse to work, a lockout is initiated by the employer, noted the news release from TCRC.

Shortly before the lockout was announced, the TCRC said they expressed the desire to continue bargaining. "Unfortunately, the employer chose to put the Canadian supply chain and tens of thousands of jobs at risk. As Canadians grapple with a never-ending pandemic, exploding commodity prices and the war in Ukraine, the rail carrier is adding an unnecessary layer of insecurity, especially for those who depend on the rail network," noted the news release.

"We are very disappointed with this turn of events," said Dave Fulton, TCRC spokesperson at the bargaining table. "Canadian Pacific management must be taken to task for this situation. They set the deadline for a lockout to happen tonight when we were willing to pursue negotiations. Even more so, they then moved the goalpost when it came time to discuss the terms of final and binding arbitration."

In final and binding arbitration, the parties agree to accept the arbitrator's decision as final. The TCRC said they were willing to explore this type of arbitration but were unable to reach an agreement with the employer.

The TCRC said wages and pensions remain major stumbling blocks. However, also at issue in these talks are working conditions that call into question the railway's capacity to recruit and retain workforce members.

Needless to say, agriculture and livestock groups are very concerned. President of the Canadian Cattleman's Association Bob Lowe told CBC News: "You're going to see a lot of hurt if it lasts two weeks. There's just not enough trucks on the planet to get enough corn up here to make a difference."

On March 18, Lowe told 770 CHQR talk radio in Calgary there are eight to 10 and even up to 12 unit trains per week of U.S. corn delivered into southern Alberta. "There is no Plan B, we don't have any other grain to replace it with," Lowe said, also indicating there are over 1 million head of cattle on feed, mostly in southern Alberta. As the beef processors can only handle so many head per day, he said animals could be euthanized rather than letting them starve. "We aren't even talking about economics; this is an animal welfare thing."

Seamus O'Regan Jr., Canadian minister of labour, said Sunday morning, "There are always challenges in bargaining, but you push through them to get the agreement you need. CP and Teamsters Rail continue their work today. Canadians are counting on a quick resolution."

Also on Sunday, Canadian Chamber of Commerce President Perrin Beatty told CTV News that O'Regan must table back-to-work legislation immediately. "This work stoppage will have a deep and adverse impact for all Canadian businesses, both big and small, who rely on rail for their supply chain," Beatty said. "This severe damage to Canadian supply chains at a time of heightened global uncertainty will extend beyond our borders and harm our reputation as a reliable partner in international trade."

Canadian Pacific indicates conciliation has been required in eight of the last nine collective rounds with the TCRC since 1993. Work stoppages have occurred during four of these events, including three consecutive rounds of negotiations since 2011. CP has not faced a work stoppage with any of their other unions since 2011 (until now of course).

The TCRC said on Twitter Sunday evening their workers want respect and a fair contract. "They want to work but they also want to be able to spend time with their families and rest. That's the least the CP can do."

The Western Grain Elevators Association tweeted: "Teamsters Canada and Canadian Pacific, Canada desperately needs you on the job right now. We can't afford a work stoppage given what we've faced this year. Will you agree to binding arbitration to avoid further disruptions in service? Sincerely, Your Customers in the Ag Sector."

Here is the statement from CP

https://www.cpr.ca/…

CP Rail has released a negotiation information hub at https://www.cpr.ca/…

Mary Kennedy can be reached at mary.kennedy@dtn.com

Follow her on Twitter @MaryCKenn

Cliff Jamieson can be reached at cliff.jamieson@dtn.com

Follow him on Twitter @CliffJamieson

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