Watch above: Labour Minister Kellie Leitch on how a strike at the rail carrier would hurt farmers and the forestry sector.
OTTAWA – The federal government says it’s preparing legislation to prevent a strike at CN Rail.
Labour Minister Kellie Leitch says a strike at the rail carrier would hurt farmers and the forestry sector.
And she warns that any job action would undermine Canada’s economic recovery.
“Our Conservative government is taking action to protect Canada’s economy and Canadian grain farmers by indicating our intention to introduce legislation to make sure CN stays on track,” Leitch told an impromptu news conference.
Leitch announced notice of pending legislation after Canada’s largest rail company received notice that one of its major unions could go on strike as early as Saturday.
The strike notice came days after the Teamster union’s membership, which includes conductors and yard workers, rejected a tentative contract reached last fall and covering 3,000 employees at Canadian National Railway (TSX:CNR).
Saskatchewan Premier Brad Wall had called on Ottawa to step in before a strike even begins. He has written a letter to Transport Minister Lisa Raitt asking her to introduce legislation immediately to prevent a walkout.
Wall says a strike would be unacceptable at a time when farmers are already having trouble moving a bumper crop of grain.
However, Leitch indicated that legislation would only be introduced should a strike be launched.
“We have a 72-hour strike notice that has been put in place. That comes into effect, they could go on strike as of Friday evening going into Saturday at one minute past midnight,” the minister said.
“And our intention would be to bring them back to work.”
Talks on resolving the issue began on Monday. The union gave its strike notice Tuesday evening.
The earliest that the workers could walk off the job is 12:01 a.m. ET on Saturday.
Wall said in his letter that the Saskatchewan Agriculture Department has calculated that the grain backlog caused by a rail car bottleneck “could result in financial damages calculated in the billions of dollars. A strike at this time would further exacerbate an already intolerable situation.”
He said it is extremely disappointing that the union would pick a time when grain movement is already facing serious problems to serve strike notice.
“Our agricultural producers deserve better than to be held hostage by one organization at a time when there is already tremendous frustration with the rail system’s failure to serve their needs adequately,” the premier wrote.
CN said Wednesday the two sides plan to resume talks with the assistance of federal mediators.
Teamsters spokesman Stephane Lacroix said the union has a number of concerns, including the health and safety of workers. He said the contract was rejected by 67 per cent of union members who voted, because they didn’t like the way the railway is being run and didn’t feel their collective agreement is being respected.
He also said a number of grievances were filed against CN in January and noted workers are worried about their safety.
But Lacroix said he hasn’t given up on negotiations continuing.
“Consequently, we hope that we’re going to be successful in reaching an agreement with the employer before Saturday.”
Last month, there was a derailment and fire involving a CN train in northwestern New Brunswick.
There also have been four train derailments in Alberta recently, including one last October that sparked a fire that forced the evacuation of the village of Gainford. CN dispatched its top brass to handle the crisis after 13 cars carrying crude oil and liquefied petroleum gas came off the tracks and caught fire west of Edmonton.
Jim Vena, CN executive vice-president and chief operating officer, said the railway will decide “our next steps at the end of the day if we fail to reach an agreement with the union.”
RBC Dominion Securities analyst Walter Spracklin said he expects the federal government to introduce back-to-work legislation if there’s a strike.
“The strike notice comes as somewhat of a surprise to us given it had appeared that the two sides were close to ratifying a previously negotiated tentative agreement,” Spracklin said in a research note.
“Nevertheless, we believe potential downside is limited by the fact that the Canadian government has historically viewed rail as an essential service and has invoked back-to-work legislation within short order. Accordingly, if a labour stoppage does occur, we would expect the government to enforce this legislation within one week’s time, which could result in a potential EPS (earnings per share) hit of less than two cents,” Spracklin said.
Wall’s letter is not the first Raitt has received about the railway grain backlog. Prairie farm groups say they wrote to her last month to ask her to help get their crops to market.
The groups want to meet with Raitt in Ottawa during the last week in February, but they say she has not responded to their letter.
– With files from Jennifer Graham in Regina
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