Canada’s two major freight railroads, Canadian National and CPKC, are facing a potential halt to their train operations on Thursday if they do not reach new contracts with the union representing their engineers, conductors, and dispatchers. The government of Canada is closely monitoring the situation and may step in to prevent extensive harm to the economy. Both railroads have been gradually shutting down their operations ahead of the contract deadline, and all traffic is set to stop if an agreement is not reached before the deadline.
In contrast to the Canadian negotiations, CSX in the U.S. recently broke away from the industry norm of joint bargaining with unions. They successfully reached a deal with three of their 13 unions, providing significant benefits and raises for around 1,600 clerks and carmen. This departure from the usual negotiation process highlights a new approach to labor relations in the industry.
Canadian Prime Minister Justin Trudeau has urged both sides to come to a resolution, emphasizing the potential economic damages that could result from a complete shutdown of rail services. Numerous business groups have also been pressuring Trudeau to take action, although he has been hesitant to force arbitration out of respect for the involved unions.
The negotiations are primarily stuck on scheduling issues for rail workers and concerns about fatigue prevention and adequate rest periods. Both railroads have proposed transitioning to an hourly wage system from the current miles-based pay structure, aiming to provide more predictable time off for employees. The negotiations also include discussions on wage increases, with current salaries for engineers at Canadian National averaging around $150,000 a year.
If the railroads were to cease operations, nearly 10,000 workers covered by these contracts would be affected, causing disruptions to various industries that rely on rail transportation. Businesses dependent on rail services for the transportation of raw materials and finished goods could face significant challenges. Additionally, manufacturing companies may have to reduce or halt production without timely rail services, leading to potential economic setbacks.
