Summary
- Negotiation Resumption: Talks to avert a major railroad strike in Canada will resume on August 7 after a long stall.
- Parties Involved: Canadian National Railway (CN), Canadian Pacific Kansas City (CPKC), and the union representing workers.
- Government Involvement: Labor Minister Steve MacKinnon is leading the efforts, with federal mediators also participating.
- Economic Impact: The railways transport nearly C$400 billion in goods annually.
- Union's Standpoint: Teamsters Canada Rail Conference aims to increase the pace and frequency of discussions, representing about 10,000 workers.
- CEO's Prediction: Keith Creel, CEO of CPKC, suggests a work stoppage is "most probable" as both sides are still far apart.
- Financial Impact: CN has cut its earnings forecast, and both railways' shares have underperformed in the market.
- Government Assessment: No strike can occur until the government assesses critical shipments' impact on health and safety, with a ruling expected on August 9. A strike could commence three days later.
Detailed Summary
Negotiations to prevent a significant railroad strike in Canada will restart on August 7, following a prolonged impasse. Leaders from Canadian National Railway (CN), Canadian Pacific Kansas City (CPKC), and the union representing their workers met with Labor Minister Steve MacKinnon on August 5. These discussions aim to prevent a work stoppage that could severely disrupt the supply chain, given the railways' annual transport of approximately C$400 billion (about $290 billion) in goods. MacKinnon emphasized the seriousness of the situation in his statement.
Christopher Monette, spokesperson for the Teamsters Canada Rail Conference, which represents about 10,000 workers, expressed the union's goal to expedite the discussions. Monette indicated that a work stoppage could be avoided if both companies presented fair proposals.
Keith Creel, CEO of CPKC, noted on an analyst call that a work stoppage seems highly probable, as the parties remain significantly divided. Both CN and CPKC have made little progress since negotiations began in November last year. Due to the uncertainty, CN has reduced its earnings forecast, and the shares of both railways have underperformed compared to the S&P/TSX Composite Index's 6% rise this year.
The government must finish assessing which shipments need to continue during a work stoppage before any strike can occur. The Canada Industrial Relations Board's ruling on how a service interruption might impact health and safety is expected on August 9, with a potential strike starting three days after the ruling.