CP Rail shutdown drags on, threatening farm output at a crucial moment

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Canadian Pacific Railway Ltd. says it is at an impasse with union negotiators in a labour dispute that has shut down the second-largest rail network in Canada, threatening the supply of fertilizer to farmers ahead of the spring planting season.

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Trains were idle for a second consecutive day on March 21, as CP and Teamsters Canada continued to argue publicly over who started the crisis. The Teamsters Canada Rail Conference (TCRC) — which represents roughly 3,000 CP engineers, conductors, and train and yard workers — is running picket lines in major cities across the country.

“We’re at an impasse,” CP spokesperson Salem Woodrow said in an interview on Monday morning, adding the railway intends to continue bargaining in good faith.

TCRC didn’t immediately respond to calls on Monday morning, but the union’s Twitter account posted a cartoon showing a businessman perched on a mountain of money, accusing a worker of being greedy for requesting a raise to their pension cap. The two sides are reportedly at odds over pensions, wages and rules around work schedules.

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CP’s net income was $2.9 billion in 2021, up from $2.4 billion the previous year, according to the company’s most recent earnings update. Annual revenues increased by four per cent to $8 billion.

The railway said it pays TCRC locomotive engineers an average annual salary of $135,442, and that the average pay of its conductors, yard workers and train workers is $107,872.

CP is also in the final stages of its plan to build the first rail network linking the U.S., Mexico and Canada. In December, CP’s US$31-billion acquisition of the Kansas City Southern (KCS) rail line closed into a voting trust. The company is now awaiting a decision later this year from the U.S. Surface Transportation Board on whether it can take control of the KCS network.

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The federal government has so far resisted pressure to step in and use back-to-work legislation to end the standoff.

“CP and Teamsters Rail remain at the table,” Labour Minister Seamus O’Regan’s office said in an email on Monday morning. “We have faith in their ability to reach an agreement. Canadians expect them to do that ASAP.”

Canadian fertilizer manufacturers and farmers say the railway shutdown comes at the worst time, since many depend on CP lines across the Prairies for their supply of fertilizer. The Russian invasion of Ukraine has destabilized one of the world’s most important bread baskets, heaping pressure on Canadian grain farmers in Western Canada to produce a bumper crop and stave off a global food crisis. But without enough fertilizer, Prairie farmers could miss a crucial window to boost crop yields, according to Nutrien Ltd., the global fertilizer manufacturer based in Saskatoon.

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A group of U.S. Senators from North Dakota, Montana and Indiana urged Prime Minister Justin Trudeau last week to avert a disruption on CP lines. The four Republican senators, led by Kevin Cramer of North Dakota, said a rail shutdown would create a “freight capacity crisis that will have a profound impact” on U.S. agriculture and energy sectors long after the labour dispute is resolved.

“Because of the Keystone XL pipeline cancellation, Canada and the US rely on CP to carry heavy Alberta crude oil to US refineries,” the March 15 letter reads. “Without the ability to move heavy Canadian crude, fuel supply shortages will be exacerbated and agricultural producers who rely on diesel to power their equipment will be forced to pay even higher fuel costs.”

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Negotiators on both sides have been in daily meetings with federal mediators in Calgary, but did not come to an agreement before the 12:01 a.m. lockout deadline on Sunday. Teamsters put out a release about 15 minutes before the deadline, blaming CP for locking out the union and putting the Canadian supply chain at risk.

“Canadian Pacific management must be taken to task for this situation,” spokesperson Dave Fulton said in the release.

But CP accused TCRC of “withdrawing services” — which essentially means workers stopped working — before the midnight deadline. After that, CP shut down its operations, Woodrow said.

“CP did not lock out its employees,” she said, adding that “CP made an offer and was sitting at the table waiting for a response” when TCRC issued its news release about a lockout.

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