Rail lockout ‘irresponsible,’ Manitoba premier says, as expert suggests Ottawa needs to step in

Posted on August 22, 2024 by Peggy

The federal government needs to step in quickly to mitigate the economic impact Canada’s railway disruption is going to have on Manitoba and the rest of the country, says an expert in supply chain management.

“There’s an old statement that hope is not a strategy, and it seemed to be like that’s what the government was expressing yesterday — hoping they’ll get the resolution. And it didn’t happen,” said Barry Prentice, professor of supply chain management at the University of Manitoba.

“I guess you could say the adults have to come in now and sort this out, if the two parties aren’t going to come to a resolution. And they better work on it pretty quick.”

For the first time in Canada’s history, freight traffic on both of the country’s largest railways has ground to a halt.

After months of bitter negotiations, Canadian National and Canadian Pacific Kansas City have locked out 9,300 engineers, conductors and yard workers after the parties failed to agree on a new contract before a midnight deadline.

The two companies move roughly $1 billion worth of goods per day, the Railway Association of Canada says.

Union members picket outside a rail yard — Teamsters union workers picket outside CN Symington Yard in Winnipeg on Thursday after being locked out. (Prabjhot Singh Lotey/CBC)

The biggest impact in Manitoba will be felt in the south, Prentice told CBC Manitoba Information Radio host Marcy Markusa on Thursday.

“About one-quarter of all their freight is grain and fertilizer, so those two are going to be affected quite substantially,” he said.

Intermodal containers make up about another quarter or so of what moves, he said. Rail intermodal refers to shipping containers moved on rail flatbeds, then shifted to semi-trailer trucks to be transported on roads.

Those containers carry various goods, including retail products and industrial items.

“So there’s a big impact on those two right away,” Prentice said, referring to the container and agriculture supplies.

As for the northern Manitoba rail lines, they’re more immune to what is happening across the south, Prentice said.

“The Hudson Bay Railway is not going to be on strike, and they do depend on things going up to Churchill, but it’s a pretty small part of the total scheme of things,” he said.

The average person is also unlikely to feel any immediate shock, though supply-chain issues could be felt in a short time, Prentice said.

“What the railways moves is basically raw materials and bulk products, so I don’t think there’s going to be too much impact per se on the cost of food,” he said.

“Now, obviously if the railway rates go up, that could affect certain things that are being moved, but it’ll take a long time for that to move its way through the marketplace.”

The longer the railways remain out of service, though, the longer it will take to get them rolling again, Prentice said.

“You can’t just turn the railway on and off on the dime. For every day lost, they claim it takes at least a week for the railway to catch up,” he said.

“So depending how long this lasts, it could be a couple of months … [to clear] the congestion in the rail system.”

Manitoba Premier Wab Kinew called agriculture the backbone of the provincial economy and said his government has been talking to its federal counterpart to express concerns about the stoppage.

“This is really bad for our provincial economy and it’s irresponsible of these two companies to be locking out their employees,” he told Markusa on Thursday.

“For the folks in the middle of harvest season, heading deeper into harvest season, it’s a big concern about getting ag product to market, but it’s also going to have an impact on input costs and just the overall uncertainty.

“We need the federal government to bring this situation to an end.”

Just how to do that, though, also falls into the category of uncertainty.

“I know there’s been some conversation around binding arbitration, but I don’t know if that’s the right fit in this situation, because you have a lot of detailed health and safety sort of considerations. Bringing in an arbitrator at the 11th hour might not be the best resolution,” Kinew said.

Prentice believes the government will have to do something — “pull Parliament together and pass legislation and force the system back into action” — within seven to 10 days if the impasse isn’t resolved.

“It just is simply too great an impact on the economy to just ignore this and try to hope that the workers and the railways will work [and] find a solution,” he said.