Canada rail strike ends by forced arbitration: Update

Adds comments from railroads, Canadian Propane Association and background.

A Canadian rail strike that started early Thursday morning will be short-lived as the federal government stepped in to force the union and two railroads into binding arbitration.

The federal government is now directing the Canada Industrial Relations Board (CIRB) to "assist the parties in settling the outstanding terms of their collective agreements by imposing final binding arbitration," labour minister Steven MacKinnon said Thursday.

At 12:01am ET today, Canadian Pacific Kansas City (CPKC) and Canadian National (CN) locked out union members, while the Teamsters Canada Rail conference launched a strike at CPKC. The work stoppage froze ongoing train shipments, even if they have not yet reached their destinations.

CN ended its lockout at 6pm ET and initiated its service recovery plan. CN said it is satisfied that the labour action has ended, but it is "disappointed that a negotiated deal could not be achieved at the bargaining table despite its best efforts."

CPKC said it would restart operations once it receives orders from CIRB.

"Our teams are already preparing for the safe and orderly resumption of our rail network and further details about timing will be provided once we receive the CIRB's order," CPKC said.

CPKC chief executive Keith Creel said the railroad regrets that the government had to intervene because he believes in and respects collective bargaining, but "given the stakes for all involved this situation required action."

Though the work stoppage lasted less than a day, it may take weeks for rail operations to return to normal. The Canadian railroads last week embargoed shipments of toxic materials and earlier this week stopped loading any new railcars. Instead it focused on delivering already-loaded trains to their destination.

Shippers across North America feared the impact of the work stoppages.

The Canadian Propane Association today said that for each day that propane is not delivered, there is a sales loss of C$9.82mn and that would rise to $75.2mn after seven days.

Labour minister MacKinnon has the authority under section 107 of the Canada Labour Code to mandate the sides return to the bargaining table, a tool the federal government was reluctant to use until now.

By Brett Holmes and Abby Caplan