Canadian Pacific Kansas City Says Railroad Strike Unlikely in Next 60 Days — Update

By Paul Vieira

OTTAWA--Canadian Pacific Kansas City says it could take up to two months for the country's labor-relations board to issue a decision on whether the country's railroads must transport certain goods during a labor disruption.

This could push back the timing of a simultaneous strike by more than 9,000 unionized workers at both CPKC and Canadian National Railway into late July or early August. The union originally set May 22 as the start date for a simultaneous strike at both of Canada's biggest railroads, an event that could have major reverberations on North American supply-chain networks.

CPKC issued its expectations for timing in a statement Thursday, in which it also said it will resume talks with Teamsters Canada on Friday on a new collective-bargaining deal with its rail-traffic controllers. The railroad added that CPKC offered to enter binding arbitration to avoid a work stoppage, but the union declined.

Teamsters Canada didn't immediately respond with a request for comment. In a note this week to members, the union said the time required for the labor-relations board to complete its work "is virtually impossible to predict."

Last week, Canada's Labor Minister, Seamus O'Regan, asked the Canadian Industrial Relations Board to review whether the country's railroads must continue to transport certain goods due to health-and-safety concerns in the event of a possible labor disruption. The board said interested parties have until May 21 to file submissions.

The labor-relations board has said parties--such as the railroads, the union and companies--have until May 31 to file rebuttals to those submissions.

"Based on precedent, it is unlikely the parties will be in a position to initiate a legal strike or lockout within the next 60 days," CPKC said. It added that the Labor Minister's request "has created uncertainty regarding the timing of a potential work stoppage and corresponding interruption of rail service on our Canadian network."

A spokesman for the labor board said he could not provide a timeline for a decision, adding the board would work "as expeditiously as possible." Under Canadian labor law, neither the union nor the company can begin a strike or lock out workers until the board issues its decision.

CPKC added it has proposed to Teamsters Canada that both parties begin talks on what services should be maintained in the event of a labor disruption. Such a move could remove uncertainty regarding the timing of a labor disruption, the company said.

Teamsters Canada, which represents train conductors, locomotive engineers and railyard employees, is negotiating three collective agreements with Calgary-based CPKC and Montreal-based Canadian National, and has said the companies are trying to strip out important safety provisions from the current agreement, such as a set rest period between shifts. Both railroads have said they are not seeking to compromise safety.

Combined, the two railroads - which also transport goods into the U.S. - shipped goods last year valued at about 400 billion Canadian dollars, or the equivalent of $294 billion.

In the event of a strike or a decision by companies to lock out employees, neither railroad could carry goods into the U.S.

CN operates about 20,000 miles of tracks, connecting Canada's Eastern and Western coasts with the U.S. South, and carries about 300 million metric tons of cargo annually. CPKC's network also runs about 20,000 miles, serving markets across Canada, the U.S. and Mexico.

Labor Minister O'Regan's decision to seek clarity from the industrial-relations board was partly prompted by concerns from propane producers about a potential disruption in freight-rail service. In a letter to O'Regan, the Canadian Propane Association said propane is used by textiles and dairy producers, farmers, schools and community hospitals in rural parts of the country.

"Propane movement must be given priority," said Shannon Watt, the association president. "The timely delivery of affordable and low-emission propane is essential to the health and safety of individuals across Canada."

Write to Paul Vieira at paul.vieira@wsj.com

(END) Dow Jones Newswires

May 16, 2024 10:51 ET (14:51 GMT)

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