CN Rail strike causing dire propane shortages in Quebec, warns Premier François Legault

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Quebec is in danger of running out of propane within five days if a CN Rail strike drags on, Premier François Legault warns, putting heating supplies for health-care institutions, seniors homes and farmers at risk.

The Premier called on the federal government to accelerate the labour talks and intervene if necessary with special legislation, adding that the province cannot afford a prolonged CN work stoppage.

“We are in a state of emergency,” Mr. Legault told reporters in Quebec City Thursday. “There are hospitals and seniors residences that are heated by propane. Animals, too, like calves and chickens. We could lose a lot of animals and a lot of food.”

Quebec’s looming shortage, and separate warnings by Saskatchewan’s Premier that a lingering strike could cause job losses in his province, increases pressure on Prime Minister Justin Trudeau’s government to end the conflict. A disruption lasting to the end of the month could take a bite as big as $2.2-billion out of Canada’s gross domestic product, economists at Toronto-Dominion Bank said.

Federal Transport Minister Marc Garneau said Thursday that the government wants an end to the conflict as soon as possible. “We know that with this strike, there is a large impact economically to all regions of Canada,” the minister told reporters. “We have been encouraging from the beginning the two sides to find a solution to this.”

Quebec has already started to ration its propane use and is trying to obtain as much as possible by truck while CN’s rail transport remains suspended, Mr. Legault said. The province typically uses about six million litres of propane a day. Usage has been narrowed to just less than half that amount, giving the province reserves of about 12 million litres, or enough for around four days, he said.

Mr. Legault’s Coalition Avenir Québec government has been working with propane distributors to prioritize deliveries to health centres, seniors residences and schools, and is now focusing on farms, said Claude Potvin, spokesperson for provincial Energy Minister Jonatan Julien. She was unable to provide the number of establishments that use propane as their main source of power, but said they are typically located in more remote areas. Roughly 300,000 personal residences in Quebec are also powered by propane or hot water, she said.

“What we’re trying to do is to protect the establishments that are at risk of running out in the short term and send stocks there,” Ms. Potvin said. The province has two refineries supplying propane, but depends on out-of-province supply for more than 80 per cent of its needs.

Isabelle Villeneuve, a farmer in Sainte-Marthe in Quebec’s Montérégie region, is among those at risk. She and her family grow grains and raise chickens, which are housed in two buildings heated by propane gas.

At the moment, she has some 50,000 chickens that are nearly ready for slaughter. She said she’s lowered the temperature in the buildings so that she isn’t using as much gas.

“I’m fairly worried that this drags on,” Ms. Villeneuve said, adding that her propane tanks were half full this morning before more was added. “You can’t let the birds freeze.”

Nathalie St-Pierre, chief executive of the Canadian Propane Association, said the refineries and depots in Sarnia, Ont., are seeing truck lineups of six- and seven-hours long. Canadian National Railway Co. is the only railway that travels east from Sarnia’s propane refineries, which are fed by a pipeline from Alberta.

The propane that CN ships east from Sarnia is destined for markets in Quebec, as well as Eastern Canada and parts of the United States.

Ms. St-Pierre said the loss of rail transportation for propane comes at a time of high demand: grain farmers are using it to power crop dryers after a wet, late harvest, and cold weather has driven up demand for home and business heating.

“That’s the making of a perfect storm,” she said by phone. “The rail is a major, major part of the infrastructure delivering propane.”

CN’s 3,200 train conductors and yard workers went on strike early Tuesday morning after mediated talks failed to yield a contract agreement. The walkout has halted freight on Canada’s largest rail network, affecting a broad swath of the economy, from chemical makers to grain traders and retailers.

Talks continued on Thursday, but the two sides remain far apart, the union said. “CN has yet to move in a substantial manner on any of the safety issues that we are raising,” said Christopher Monette, a spokesman for the union, Teamsters Canada Rail Conference.

Both sides have been working with a mediator for several months. The union is opposed to CN’s attempt to send the disagreement to an arbitrator. Labour Minister Patty Hajdu has expressed support for the collective-bargaining process, dashing initial hopes of business that the government would legislate an end to the strike. The mounting effects of the stoppage, however, are testing that position.

The Teamsters’ Mr. Monette questioned how a propane shortage could arise so quickly, given it’s a commodity that commonly moves by truck, and Canada’s other major railway is not on strike. CN is still operating some trains and has ordered its train engineers, who are not on strike, to continue to work or face discipline, he said.

But for most rail customers, who ship in large quantities over long distances, trucks are not an alternative. Nor is Canadian Pacific Railway Ltd., because a propane terminal, mine or grain elevator’s location dictates which railway it must use.

And, said Ms. St-Pierre, “If you contracted with CN, it’s not easy to change.”

Jonathan Abecassis, a CN spokesman, declined to comment on Mr. Legault’s statement, nor provide details of the contract negotiations. Sarnia refinery operator Plains Midstream Canada declined to comment.

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