Huge rail blockage in Canada is also a problem for the US economy

A potential “economic catastrophe” is looming north of the border. Since Thursday, Canada's two largest railways, Canadian National (CN) and Canadian Pacific Kansas City Southern (CPKC), have been shut down. Both normally transport goods between Canada and the USA.

Ottawa news anchor Bill Carroll used those words – “economic catastrophe” – as he explained the impact of the work stoppage this morning. These two rail lines are responsible for more than 9,300 workers and deliver goods to numerous industries, including auto parts, agriculture, housing and energy services.

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The Teamsters Canada Rail Conference has been out of contracts with the two companies since late last year. After months of failed negotiations and threats of strikes in the fall, the workers are now locked out. The union had demanded guarantees to resolve the staff shortage problems; the companies offered wage increases but demanded various concessions on working hours and availability.

The two major railroads have never shut down at the same time. How long could this continue? That remains to be seen, as the two sides are reportedly still far apart. In 2022, there was a 60-hour work strike at CPKC, according to CBC. CN last saw a work stoppage in 2019 during a nine-day strike.

Paul Boucher, chairman of the Teamsters Canada Rail Conference, said the railroads' only focus is to “increase their profits, even if that means putting the entire economy at risk.” According to CNN, the shutdown could indeed have serious consequences for U.S. auto factories, farmers and water treatment plants. Until now, the two companies had transported a billion dollars worth of products every day.

Justin Trudeau, Canada's prime minister, urged both parties to reach an agreement earlier this week, to no avail. “It is in the best interest of both sides to continue to work hard at the negotiating table to find a negotiated solution,” he said yesterday, according to Reuters, noting that “millions” of workers, farmers and businesses are affected by this back and forth.

Today, Trudeau added: “We do not take this lightly, because it is something that Canadians across the country are concerned about. We will be sharing more shortly about what we are doing to make sure that the right solution is found quickly for the economy,” according to CNN.