Potential Strike Is Latest Blow to Canada's Rail Backlog

(Bloomberg) -- Thousands of workers at Canada’s second-largest railway could walk off the job as early as Tuesday, adding to the transport woes that have stranded commodities across the nation’s Prairies.

More than 3,000 of Canadian Pacific Railway train conductors, engineers and electrical workers represented by Teamsters Canada and the International Brotherhood of Electrical Workers could walk off the job as early as Tuesday at 10 p.m. Eastern Daylight Time if a negotiated settlement isn’t reached, according to a Teamsters Canada statement Saturday. Teamsters members voted 98.1 percent to reject the company’s final offer on Friday.

“CP is offering more of the same contract language that workers just voted to reject a few hours ago,” Doug Finnson, president of Teamsters Canada, said in the statement. “The company clearly isn’t serious about reaching a negotiated settlement.”

The company will continue to meet with the unions in the hopes of reaching an agreement, CP said Saturday in a statement. The railway has started its contingency plan for a work stoppage and will work with customers to ensure a “smooth, efficient and safe wind down of operations,” according to the statement.

Rail Capacity

The uncertainty over a possible labor disruption comes after a lack of adequate rail capacity led to piles of commodities being stuck on Canada’s Prairies this winter, including grain, oil and lumber.

A potential work stoppage that lasts even a week could cause “serious financial consequences” for grain shippers, said Wade Sobkowich, executive director of the Winnipeg, Manitoba-based Western Grain Elevator Association, which represents the nation’s largest exporters, including Richardson International and Viterra Inc. Exporters are already facing reputational damage from last winter’s capacity shortage and a strike could be another service failure to explain to customers, he said.

“To have zero movement on one of our two major railways in Canada is a very big deal,” Sobkowich said Saturday by phone. “I can tell you the longer it goes on, the greater the impact will be.”

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