Canadian rail labor talks continue as deadline nears

Canadian railroads and a major labor union are still in discussions in the final hours before workers could go on strike.

Contract negotiations between Canadian Pacific Kansas City (CPKC), Canadian National (CN) and Teamsters Canada Rail Conference (TCRC) continued today, CPKC said. If there is no agreement tonight, the union at 12:01am ET Thursday could begin a strike against CPKC and each railroad could begin a lockout of workers. The Teamsters did not issue a required strike notice to CN, but a lockout would still shut its network down.

Railroad customers and Canadian authorities are increasingly frustrated by the lack of agreement on new labor contracts. Teamsters members have been working under the terms of contracts that expired in December 2023.

Canadian prime minister Justin Trudeau today urged the railroads and union to resolve the situation and avert a strike.

"It is in the best interest of both sides to continue doing the hard work at the table to find a negotiated resolution," Trudeau said. "Millions of Canadians, of workers, of farmers, of businesses, right across the country are counting on both sides to do the work and get to a resolution."

Canadian minister of labour Steven MacKinnon yesterday said he met with Ontario's labour minister and would be meeting with each railroad and Teamsters officials in Montreal and Calgary "to deliver our shared message: Get a deal at the table. Workers, farmers, businesses and all Canadians are counting on it."

Union members have voted twice to authorize a strike, and each railroad has indicated it will lock out union members at the same time. The latest indication is the strike could happen as early as Thursday 22 August.

"CPKC remains focused on and committed to arriving at a negotiated outcome that is in the best interests of all our railroaders and their families," CPKC said today. "We are firmly committed to staying at the bargaining table to reach renewed agreements."

The Teamsters and CN did not respond to requests for comment.

Last week, the railroads initiated embargoes on shipments of toxic inhalation hazards (TIH) and poisonous inhalation hazards (PIH) materials. Those products include chlorine, ammonia, ethylene and phosgene, as well as rail security-sensitive materials such as explosives. Each carrier has now stopped loading trains in Canada and are focused on delivering existing shipments.

Railroads also have stopped shipping trains across the US and Canada border, suspending the movement of multiple products.

US rail regulators are actively monitoring the situation, concerned about how a rail labor strike in Canada would affect the US rail network and supply chain. The US Surface Transportation Board said Wednesday it is monitoring the implementation and effects of those embargoes on the network.

A number of US railroads last week either implemented their own embargoes or said they will comply with the Canadian embargoes.

Western US coal exports are not expected to have much of a disruption if there is a strike since US carrier BNSF has rail lines going directly to Westshore Terminals near Vancouver. But BNSF will not be able to interchange railcars with CN and CPKC in Canada.

Crude markets are also not expected to see significant disruption from a strike in the short term because of pending maintenance at upstream oil sands facilities and spare pipeline capacity.

Prices for Canadian propane and butane — which rely heavily on rail to move product from an oversupplied market to the US — fell Wednesday ahead of the strike.

By Courtney Schlisserman and Abby Caplan