Opinion
Update: As of Thursday, August 22 at 00:01 eastern time, trains are parked and picket lines have formed at CN and CPKC offices and rail yards across the country as the railways and union failed to reach new collective bargaining agreements prior to the strike/lockout deadline.
I feel like all I have talked about on RealAg Radio for the past two weeks is the potential impacts of both Canadian railways going on strike. As the minutes tick down to the August 22nd strike deadline, it’s become clear that Canadians are completely comfortable with the impacts of the threat.
The comfort level that Canadians have with the railways, government, political parties, and the union playing chicken with our economy is surprising to me.
It’s not like the threat of a strike of this magnitude is without consequences. At a time when Canadians are concerned about affordability, inflation, and supply chain resilience, the level of apathy is truly staggering.
The country flirting with a new kind of shutdown not seen since the pandemic in the name of political appeasement to unions does not sit well with me.
Some have said to me nonchalantly that it’s no big deal — the strike will happen and then the government will take increased measures, the Conservatives will start talking about the issue and the union will have demonstrated its negotiating power to members, as if the script is that shallow.
This is a much more expensive game of chicken than you might think.
The PBO estimates that the capital gains changes will cost Canadians 17.4 billion over five years. That’s 3.48 billion a year. Our railways haul one billion of cargo a day. After a four day strike we will have a year of capital gains covered. This is a catastrophic situation
— Shaun Haney (@shaunhaney) August 21, 2024
The problem is that for weeks leading up to August 22nd the railways have cut shipping flow on some products to not strand crews or products in geographically-challenging expanse that is Canada. A strike is not just about the loss of the strike days; you must account for the economic impacts of the weeks leading into decision day and then the time required to get back to full capacity after the strike is over.
According to Quorum Corp, a one week strike could take up to 14 weeks to correct fully.
Think of rail capacity like a water pipe where the throughput is controlled by a valve. When the railways are running under normal conditions the valve is wide open and the capacity is being utilized to its max (we hope). When there is bad weather or bridge failure the capacity is reduced as that valve closes slightly which prevents that water pipe from being used to its fullest.
In this current situation that valve has been closing for weeks. Capacity on certain products, such as anhydrous ammonia, meat, and medicine, have been cut back as that valve slowly closes leading up to August 22nd. By the time the strike happens, the valve will be completely closed with capacity of that pipe at zero.
The same example applies when the strike is over. The valve does not just immediately open to full capacity. It opens very slowly as crews get back into place and the backlog becomes a major issue to deal with. There are only so many trains, tracks, and hours available get back to full capacity.
During the pandemic, I did so many interviews with industry leaders and politicians talking about supply chain resiliency. Resiliency became the secret word that everyone had to drop whenever they talked about our economy, supply chains, and food system. Allowing this strike to happen is the exact opposite of resiliency. Canadians have shown in polls that they are very upset and concerned about affordability — this strike only serves to make affordability much worse.
Functioning railways are the foundation of this country’s economy. There would not be the country of Canada without a national railway service. This was true when the last spike was pounded November 7th, 1885 and its true on August 22, 2024. It’s imperative that the game of chicken being played with our economy is dealt with swiftly as all Canadians lose no matter the length of the strike.
