The federal government’s decision to force rail companies and the Teamsters union into arbitration was met by relief by many Canadians impacted by the rail lockout, but supplies aren’t in the clear yet.
The Canadian Industrial Relations Board (CIRB) ruled to allow federal Labour Minister Steven MacKinnon to end the actions in Canada’s rail sector, forcing workers on the Canadian National Railway (CN) and Canadian Pacific Kansas City (CPKC) lines back to work, although it will take some time for things to resume the normal flow.
“The general rule of thumb is it takes about seven days for every one day of trains being down,” said Brent Rabik, VP of sales and supplies chains at Alberta Pacific Forest Industries Inc. (Al-Pac), the largest single-line kraft pulp producer in North America.
Workers returned to their jobs the morning of Aug. 26, meaning the initial lockout only lasted three days after CN and CPKC locked them out at 12 p.m. E.T. Aug 22. Al-Pac, alongside other companies, had been planning for the work action to take place for the last few months while the companies and union negotiated, but it still left a major impact.
“We’ve been getting as much across the border and into warehouses as we can,” said Rabik in an Aug. 21 interview.
Al-Pac only connects to CN’s rail network, so the dual lockout, which had never happened before, wasn’t as large of an impact, but it did impact their ability to look for other transportation options.
“Through COVID and other supply chain disruptions, we’ve had to truck a fair bit, but we aren’t really geared for that,” said Rabik. “There’s a limit to what we can truck just from our on-site infrastructure.
The Forest Products Association of Canada also released a statement, with president and CEO Derek Nighbor condemning the government for letting the lockout take place.
“It’s frustrating for workers and small businesses who are innocent bystanders,” he said. “What’s not being talked about enough is how it’s a massive drag on Canada’s competitiveness position and international reputation.”
Local politicians, including Athabasca-Barrhead-Westlock MLA Glenn van Dijken and Athabasca County Reeve Brian Hall, had called for the federal government to step in and end the strike — Prime Minister Justin Trudeau and his cabinet had initially called on the two parties to, “do their jobs,” and hadn’t indicated they would be getting involved.
“It’s unacceptable that both railways shut down our rail network, throughout the country, at the same time,” said van Dijken. “There’s a conversation to be had going forwards as to how we can mitigate that risk.”
Hall, alongside his fellow councillors, sent a letter on behalf of the county and its ratepayers, where he called for the government to step in.
“It’s the beginning of the harvest season, so there’s grain to move and export,” said Hall. “Whether its grain, or pulp, or oil, it’s bad for our reputation if we cannot reliably deliver products to market.”
While businesses were glad to hear the lockout would be ending, the Teamsters Union, which represents about 9,300 workers between the two rail companies, said the decision played into the hands of CN and CPKC.
“This decision by the CIRB sets a dangerous precedent. It signals to corporate Canada that large companies need only stop their operations for a few hours, inflict short-term economic pain, and the federal government will step in to break a union. The rights of Canadian workers have been significantly diminished today,” said Paul Boucher, President of the Teamsters Canada Rail Conference in an Aug. 24 press release.
“The Trudeau Liberals have chosen to side against middle- and working-class Canadians, abandoning their supposed progressive values at the first sign of short-term supply chain disruptions.
Well-founded worries
In an interview before the lockout started, Westlock Terminals CEO Clifford Bell said a strike could have dire consequences for his company and the entire grain industry.
“It’s not a good situation for sure,” said Bell. “We are very concerned. If we don’t move grain, we don’t get paid. That’s the bottom line,” he added, noting there’s worry over a potentially long-term strike. “We are very concerned that if this strike is going to be long-term, it’s going to have some very detrimental effects on Westlock Terminals, (and) all of the grain industry.”
Bell said they have other options for transporting their commodities, but noted the challenge, saying that the export part of the business, “really needs the rail traffic.”
“The fallback is always to trucks, but it’s not as efficient and it’s very costly for everybody to revert to truck traffic. You just can’t replace everything you ship by rail or intermodal into a truck,” he said adding several domestic markets could continue such as those in British Columbia and in southern Alberta.
The Western Retail Lumber Association (WRLA) is the largest building supply association in Canada, representing more than 1,300 businesses from manufacturing to retail stores, including Windsor Plywood, which has a local business in Westlock. On Aug. 16, they sent a letter to the Minister of Labour to address the current rail labour dispute, the impact that the slowdown, or a lockout or strike, would have upon its members.
“A lock-out or a strike would have a devastating impact upon the lumber and building material sector. Such scenarios would imperil the movement of goods and by extension, the numerous people employed in the sector,” said Liz Kovach of the WRLA. “We would urge you to do everything within your ability to ensure that Canada’s railways continue to function, for the continued viability of businesses across the country.
John Davies, sales and purchasing manager with Windsor Plywood’s head office in Langley B.C. noted the impact for local economies.
“Canada has always been vulnerable to disruptions in existing transportation networks due to its position as a commodity exporter,” said Davies. “And while the anticipated impact to the overall economy has been well documented, the impact to local economies will likely vary from region to region depending upon their connection to various economic sectors.”
