Garneau says negotiated deal in CN strike would be fastest way to end dispute

MONTREAL – The federal government urged Canadian National Railway Co. and its striking workers to continue talks in what it believes would be the fastest way to resolve their dispute which has stopped freight trains across the country.

“We believe that mediation, collective bargaining, is the right way to do this, we’ve looked at the situation and we feel that the two sides need to be talking to each other,” Federal Transport Minister Marc Garneau told reporters on Friday.

“We believe that this is not only the most probable, but also the fastest way to resolve this issue so that we can find a solution and get CN back operating as it has before, delivering products across the country.”

The strike at the country’s biggest railway entered its fourth day with no resolution in sight as round-the-clock negotiations continue under the watch of federal mediators.

The Teamsters union said Friday that “no substantive progress has been made” since 3,200 workers hit the picket lines early Tuesday morning.

The union claims Quebec’s propane shortage “appears to be largely manufactured” by Canadian National Railway Co. amid rising pressure from industry and Prairie premiers to reconvene Parliament ahead of schedule and pass back-to-work legislation.

Premier Francois Legault said Thursday that the province is days away from running out of propane, which heats hospitals and nursing homes and fuels operations in agriculture and mining.

Tensions rose between CN Rail and the Teamsters Canada Rail Conference as progress stalled in Montreal late in the week.

The union framed CN’s decision to transport freight other than propane as “a business decision.” The Montreal-based railway continues to run some trains using locomotive engineers and supervisors, who remain on the job.

CN Rail rejected the union’s claim that the strike concerns workplace health and safety, suggesting instead that it revolves around worker compensation.

“While the current average salary of a Canadian conductor is $114,000 plus benefits, including a defined benefits pension plan, the union is seeking wage and benefit improvements beyond those negotiated this year with Unifor and another bargaining unit of the TCRC,” CN said in a release.

CN said it has offered to enter into binding arbitration, with a neutral arbitrator chosen by the parties or appointed by the federal government.

A prolonged disruption to CN Rail – a critical artery for imported consumer goods and a key export channel for commodities ranging from grain to fertilizer and forestry products – could dent the country’s economy.

The strike could cost the Canadian economy up to $2.2 billion if it lasts through the end of the month, and up to $3.1 billion if it continues until Dec. 5, according to TD senior economist Brian DePratto.

A nine-day strike at Canadian Pacific Railway Ltd. in 2012 drove a nearly seven per cent drop in the goods sector that month, DePratto said. Federal back-to-work legislation ended the labour disruption.

“Should this strike drag on, it would clearly be disruptive to the Canadian economy and to the company in question,” said Avery Shenfeld, chief economist at CIBC Capital Markets.

“An extended strike risks seeing a near flattening in economic activity to finish the year,” he said in an email, noting fourth-quarter GDP growth had been expected to hit one per cent.

Nearly two-thirds of propane travels along the tracks at some point – in Quebec, about 85 per cent arrives by rail – with the rest shipped by truck, according to the Canadian Propane Association.

As of Sept. 30, CN had shipped in 2019 some $11.33 billion in total freight along its 22,000 kilometres of track, which stretches from Vancouver to Halifax to the U.S. Gulf Coast.

Christopher Reynolds, The Canadian Press