CN reaches tentative deal with Teamsters, workers to be back on the job Wednesday

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A tentative deal has ended the eight-day strike by Canadian National Railway Co. conductors and railyard workers, averting the need for back-to-work legislation to resume the flow of goods across Canada’s largest rail network.

The strike halted the movement of many of Canada’s export commodities, everything from wheat to potash. It also raised fears of a shortage of propane in parts of the country, used to heat homes, power hospital backup generators and by farmers to dry crops after harvest.

Federal ministers praised the two sides for reaching an agreement after Prime Minister Justin Trudeau resisted calls to force back to work the 3,200 union members who have been without a contract since July.

“Had we taken an approach like the previous government of deciding to legislate back to work, we would not have a solution today,” said Transport Minister Marc Garneau, who spoke with reporters on Parliament Hill alongside Labour Minister Filomena Tassi.

The Trudeau Liberal government has used back-to-work legislation once, in 2018, to end a strike by Canada Post workers. Under Conservative prime minister Stephen Harper, the government introduced such legislation six times and passed four of those bills into law.

The House of Commons is not scheduled to sit until Dec. 5. Mr. Garneau noted that even if it had been called back early, bringing a bill through all stages and into law would take time.

Explainer: The CN rail strike: A guide to how it started, how it ended and what it’s cost Canadians so far

Conservative MP and labour critic John Barlow said the Prime Minister should have acted sooner and pushed publicly for a faster resolution. As a result, he said the work stoppage hurt the economy and damaged Canada’s reputation with its trading partners.

“Had we acted immediately, we could have had this resolved days ago,” he said.

The Teamsters Canada Rail Conference said its members will return to work by Wednesday morning, ending the longest rail strike in a decade. Details of the deal, which must be ratified by union members, were not available. The issues included rest periods, benefits and CN’s use of remote controls to drive trains, the union had said.

CN said workers began to return to work Tuesday afternoon and trains will begin moving in the railyards by Wednesday morning. CN said results of the ratification vote will be available within eight weeks. In 2014, the same group of CN workers rejected two tentative agreements recommended by its union leaders before a new contract was reached.

Robert Lewis-Manning, president of the B.C. Chamber of Shipping, called the end of the strike “very positive.”

CN trains handle the majority of containerized cargo imported from Asia and about half the potash, grain and other bulk commodities that are exported from the West Coast. “We were pretty close to running out of a lot of those commodities, especially on the Lower Mainland,” Mr. Lewis-Manning said by phone. “It’s going to take a while for that product to get back up to the inventory they need to fill ships to full capacity. I think we have at least two to three weeks of catch-up.”

The Canadian Federation of Agriculture, which represents farmers, said the strike happened at a critical time for growers, who were trying to dry their crops and ship the harvest to grain elevators.

"The delays in rail service have resulted in significant costs for farmers in the form of hefty demurrage fees from ships forced to wait at port as well as potential losses of crops due to a lack of propane for grain dryers,” said Mary Robinson, president of the group.

CN and other North American freight carriers are seeing declines in several kinds of freight, as the U.S. manufacturing sector and global commodity markets react to slowing economic growth and a trade war ignited by the protectionist policies of U.S. President Donald Trump.

The market’s outlook for CN’s profit for the final three months of the year could be reduced, given the strike slashed weekly revenue ton miles by 36 per cent, and carloads by 20 per cent, compared with a year earlier. Since the beginning of October, CN’s revenue tonne miles, a closely watched industry gauge, fell by 14 per cent.

“It would be difficult for CN to recover 100 per cent of the volumes lost during the eight-day strike,” Scotiabank analyst Konark Gupta said in a research note on Tuesday. “Some volumes could potentially take more time to recover due to winter or market share losses.”

Fertilizer maker Nutrien Inc. said on Monday the strike caused the two-week shutdown of its potash mine in Rocanville, Sask., and layoffs for 550 of the 600 employees, beginning on Dec. 2. Jeff Holzman, Nutrien’s director of corporate relations, said on Tuesday the end of the strike will not change these plans.

Mr. Holzman said the backlog of potash at the mine coupled with the excess supplies customers received in anticipation of the strike mean the halt is needed to allow the supply-demand balance to be restored.

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