Given the cost and frequency of labour disputes, it's high time rail service be deemed essential



The 2.5 day shutdown of CP Rail’s network last month was a sharp reminder why rail service, especially for agricultural commodities, should be deemed essential.

Although the strike/lockout only lasted from a Sunday to a Tuesday, it caused weeks, even months, of disruption in already-stressed supply chains that rely on trains. The entire system was slowed down during the weeks leading up to the shutdown, and shippers say they expect it will take weeks to catch up, resulting in major economic and social costs for millions of Canadians.

And this stoppage was just the latest in what’s become a pattern of labour negotiations between railways and unions playing chicken with the Canadian economy.

The shutdown on March 20 marked the fourth consecutive case where labour talks between CP and the Teamsters Canada Rail Conference have resulted in a work stoppage — 2012, 2015, 2018, and now 2022. As for CN Rail, the Teamsters union spent eight days on strike in 2019 as part of their most recent collective bargaining round.

Each of these stoppages have caused unnecessary damage to businesses that employ people across the country and to Canada’s reputation as a reliable trading partner.

Given the enormous public cost, there’s a strong argument to be made for requiring railways and their employees to maintain at least a minimum standard of service for basic goods, such as grain and fertilizer, while they go through the back-and-forth of reaching new collective bargaining agreements. We can look at law enforcement and healthcare sectors as examples where legislation aims to ensure the public’s interest is accounted for when there’s a labour dispute.

There’s even precedent in the the Canada Labour Code (CLC) when it comes to moving grain at ports during labour disputes. Section 87.7 specifically says port workers must continue to move grain during a work stoppage. It’s not unreasonable, as the Western Grain Elevator Association and other shippers are pointing out, to assume that requirement for port workers could be extended to the railways that move grain to and from those port terminals.

In fact, the Liberal chair of the House of Commons’ agriculture committee, Kody Blois, agrees the government should consider expanding those minimum service provisions for grain from dockworkers to include railways.

“We have it at the ports, which is great, but if you don’t have it at rail, it’s kind of a missing link. So I think that’s something to consider. I don’t want to speak on behalf of the government. But I think it’s something that we could be exploring in the days ahead,” he said, joining the Friday Issues Panel on the March 25th edition of RealAg Radio (listen here, starting around the 10:30 mark).

“There is a provision right now that says longshoremen — the unionized workers at the port — have an obligation under the CLC as it relates to grain shipments, to continue to serve those necessities, notwithstanding the fact that there could be a strike action. So how can we put that type of language in for agricultural commodities to say ‘we’re not saying that you have no right to strike, but we’re saying as it relates to basic agricultural commodities, is there something similar that could be established on the rail lines to provide minimum service?’ I think that could be something we could look at that is a halfway point,” said Blois.

The former chair of the Canadian Transportation Agency poured some cold water on calls for rail to be deemed essential as part of a panel discussion on rail reliability hosted by the Canadian Agricultural Policy Institute (CAPI) on March 28.

While panelists Wade Sobkowich of the Western Grain Elevator Association and Karen Proud of Fertilizer Canada advocated for changes to prevent work stoppages, Scott Streiner, who was with the CTA until May 2021, shared a list of reasons why he doesn’t see it happening.

First, Streiner noted it would require political will to reopen and push through changes to the Canada Labour Code. Second, the Supreme Court of Canada has repeatedly ruled in favour of the right to strike over the last 15 years. The ability to strike “is now a constitutionally-protected right,” he noted.

I’m certainly no expert on the labour code or Supreme Court rulings, but there has to be a way to ensure rail labour negotiations account for the interests of millions of Canadians.

With a growing North American political focus on increasing competition in highly concentrated markets, there may even be a competitive basis to move forward on deeming rail service essential, as both CN and CP operate as monopolies in many of their interactions with individual customers.

If deeming rail essential isn’t doable, there other steps that could also be taken to possibly mitigate some of the costs of work stoppages.

One possibility that was suggested in the CAPI discussion would simply be the facilitation of longer collective agreements. Eight or ten year deals would certainly provide everyone involved, including shippers and their customers, with more predictable service than the status quo three or four year agreements.

There’s also a case to be made for introducing more competition to the rail system, as railways would face higher pressure to resolve labour disputes if they were at risk of losing business to another railway. That might mean increasing access to interswitching — when a railway is allowed to pull cars off another rail company’s line — or a move toward dual running rights.

Perhaps there could also be an accountability mechanism introduced to the grain movement plans that the federal government requires CN and CP publish each year, which might “be more reminiscent of a competitive environment,” noted Sobkowich in the CAPI discussion.

It’s often said the definition of insanity is doing the same thing over and over again and expecting different results. Those who fail to learn from history are also doomed to repeat it.

CP and the TCRC may have agreed to binding arbitration to end the latest rail stoppage, but there’s another major railway labour deadline around the corner: the three year deal that CN reached with the TCRC after the eight-day strike by more than three thousand employees in 2019 is set to expire on July 22, 2022.

Given the frequency and cost of work stoppages at a time when the economy is already struggling, it’s time politicians and regulators move to break this costly cycle around railway labour negotiations.

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