Canada's CP Rail Shuts Down Railroad, Workers Strike

(Reuters) — Canadian Pacific Railway Ltd (CP) (CP.TO) halted operations and locked out workers over a labor dispute early today (March 20), with each side blaming the other for a halt that will likely disrupt shipment of key commodities at a time of soaring prices.

"We are very disappointed with this turn of events," said Teamsters Canada Rail Conference (TCRC) spokesperson Dave Fulton.

The union said in a statement that it had begun to strike across the country in the dispute that it says affects 3,000 engineers, conductors, and yard workers.

Canada's second-biggest railroad operator accused the union of misrepresenting the company's position, saying in a statement that the Teamsters were "well aware of the damage this reckless action will cause to the Canadian supply chain."

Minister of Labor Seamus O'Regan Jr said CP and Teamsters were still at the table with federal mediators.

"We are monitoring the situation closely and expect the parties to keep working until they reach an agreement," he said in a tweet just after midnight.

Canada, the largest country by area after Russia, depends heavily on rail to move commodities and manufactured goods to port.

CP's network runs across much of southern Canada and extends as far south as Kansas City in the United States.

The lockout is the latest blow to Canada's battered supply chain, which last year weathered floods in British Columbia that washed out track and suspended access to Canada's biggest port.

CP has said a stoppage would disrupt the movement of grain, potash (an ingredient in fertilizer), and coal.

CP had notified the union on Wednesday (March 16) that it would lock out employees today, barring a breakthrough in talks on a deal covering pensions, pay, and benefits.

It said the key bargaining issue is the union's request for higher pension caps.

Chief Financial Officer Nadeem Velani told a New York investor conference on Tuesday that the railway was unwilling to accept that demand.

Canada's Nutrien said this week it may need to reduce potash production at its mines in the province of Saskatchewan if the shutdown lasts longer than a few days.

The country's last major railway labor disruption was an eight-day Canadian National Railway Co (CNR.TO) strike in 2019.

But in the past 12 years, there have been 12 stoppages due to poor weather, blockades, or labor issues, according to the Western Canadian Wheat Growers Association.

Related Articles:

Canadian Pacific Railway's Potential Lockout Would Leave Shippers Few Options

India Boosts Fertilizer Imports From Canada, Israel as Russian Supply Disrupted

Canadian Firm Aims to Double Potash Output in Project Near Brazil Indigenous Lands