Canadian Pacific Railway labor strike ends after two days

A Canadian Pacific Railway labor strike of locomotive engineers, conductors, and train and yard workers across Canada was resolved after two days on March 22, averting significant disruption to petroleum, agricultural and mining products in North America.

Canadian Pacific and the Teamsters Canada Rail Conference said they reached a deal with roughly 3,000 employees agreeing to return to work midday on March 22. CP said it will immediately begin working with customers to resume normal train operations across Canada as soon as possible.

"CP is pleased to have reached agreement with the TCRC negotiating committee to enter into binding arbitration and end this work stoppage," said CP CEO Keith Creel in a statement. "This agreement enables us to return to work effective noon Tuesday local time to resume our essential services for our customers and the North American supply chain."

In such a binding arbitration process, both parties agree to accept the arbitrator's decision as final.

"The decision to agree to final and binding arbitration is not taken lightly," said Dave Fulton, TCRC spokesperson at the bargaining table, in a statement. "While arbitration is not the preferred method, we were able to negotiate terms and conditions that were in the best interest of our members."

Fulton said that wages and pensions remained stumbling blocks in the negotiations.

Supply chain disruptions

The strike came amid global supply chain disruptions from the ongoing pandemic, as well as severe weather disruptions in Canada in recent weeks.

Several US senators wrote a letter to Canadian Prime Minister Justin Trudeau last week urging for action to prevent the strike. They said an extended strike would have significant market implications from agriculture to energy and exacerbate the ongoing supply chain crisis.

Up to 15% of Canadian Pacific's business is fertilizer shipping and the US relies on the railway to move Alberta crude oil south to US refineries.

Canadian crude-by-rail exports are low these days as new pipelines have opened, but rail still shipped more than 130,000 b/d of crude to the US as recently as December, according to the Canada Energy Regulator.

Mining Association of Canada President and CEO Pierre Gratton said March 20 that the mining industry is the Canadian rail system's most significant customer and was strongly impacted by the strike.

According to the Mining Association of Canada, the mining industry is a major sector of Canada's economy, contributing C$107 billion (US$84.9 billion) to the national GDP and is responsible for 19% of Canada's total domestic exports.

In 2019, shipments of coal, iron ore, potash and other minerals and metals represented 52.5% of total Canadian rail freight volume, he said.

"The majority of this production volume is shipped to international customers, accounting for 21% (C$102 billion) of the total value of Canada's total domestic exports in 2020, and consistently contributes positively to Canada's balance of trade," Gratton said at the time.