Some rail operations resume in Canada following union dispute

Canadian National Railway on Thursday evening ended its lockout of union workers after the government stepped in to address the labor dispute between the Teamsters union and Canada's two major freight rail companies. Labor Minister Steve MacKinnon on Thursday ordered the Canadian Industrial Relations Board to impose binding arbitration and ordered the railroads and union workers to return to work. 

The Teamsters said the move will allow the railroads to sidestep the union. Canadian Pacific Kansas City, the other railway involved in the dispute, on Thursday said it was disappointed by the Teamster's response and that it was preparing to resume operations pending the CIRB's order. The company has yet to officially lift its lockout of union workers. 

What happened yesterday? The country’s two largest rail operators on Thursday locked out more than 9,000 unionized workers after contract negotiations with the Teamsters union halted. Canadian National Railway and Canadian Pacific Kansas City each said they engaged in months of talks over union demands for higher wages, improved rest periods, and more predictable schedules. Meanwhile, the Teamsters Canada Rail Conference said in a statement that neither rail company seriously considered contracts proposed by the union. The two railways have each said they are willing to submit to independent arbitrators to determine the terms of an agreement and settle the dispute.

How have government officials responded? Prime Minister Justin Trudeau on Wednesday called on the companies and the union to come to an agreement without government involvement. Minister of Labor Steve MacKinnon on Wednesday met with rail and union leaders, urging the groups to make a deal. Meanwhile, the leaders of the United States and Canadian chambers of commerce published a joint statement Tuesday saying that disruption to the rail service would hurt the livelihoods of workers in both countries.

How could the shutdown affect the American and Candian economies? All CNR and CPKC rail traffic inside Canada and crossing the U.S. border stopped Thursday. Thousands of shipping containers enter the United States every day by train from Canada and rail transport accounted for 14 percent of trade between the countries in June of this year, according to the U.S. Department of Transportation. Ratings agency Moody’s on Wednesday estimated that the shutdown could cost Canada about $250 million per day. The Grain Growers of Canada estimated that the stoppage could cost farmers over $50 million per day. More than 30,000 commuters in Toronto, Montreal, and Vancouver will have to find alternative transportation while passenger trains cannot operate on CPKC’s tracks.

The railway’s operations inside the United States and Mexico are expected to continue as normal.

Dig deeper: Listen to Mary Muncy’s report on The World and Everything in It about the lack of law enforcement along the U.S.-Canada border.