Farm groups sounded the alarm after workers at both of Canada’s major railways voted to strike.
“A rail strike now is the last thing we need. We’re at a critical point in the seeding season, and any delay in shipping can directly affect our bottom line and cause substantial economic losses across the agricultural sector,” said Grain Growers of Canada chair Andre Harpe in a release.
Thousands of railway workers at Canadian National Railway (CN) and Canadian Pacific Kansas City (CPKC) voted to strike May 1. That could happen as soon as May 22.
Contracts covering locomotive engineers, conductors and yard workers at CN and CPKC expired on Dec. 31, 2023, and Teamsters Canada Rail Conference is renegotiating a third agreement covering CPKC rail traffic controllers. The sides have made no progress in six months of negotiations, said Teamsters Canada president Paul Boucher, adding the companies were trying to remove rest provisions critical to safety.
The three groups, numbering 9,300 workers, each voted over 95 per cent in favour of a strike.
CN said in a statement that the union has opposed moving toward a more modern agreement based on an hourly rate and scheduling changes and has focused instead on 200 local and regional demands.
CPKC said the parties remain far apart and they now begin a mandatory 21-day period of federal mediation. The company’s proposals for rest do not compromise safety and comply with Canadian regulations, CPKC said.
Ag groups warned a strike could cause enormous collateral damage.
“When unions strike, grain elevators fill up quickly and farmers are not able to deliver grain,” wrote Wheat Growers Association president Gunter Jochum in an April 24 letter to federal labour minister Seamus O’Regan also posted on social media platform X.
Lack of grain movement becomes a cash flow problem because producers are paid upon delivery, Jochum wrote. “This is particularly crucial during seeding season when farmers have to pay for their inputs.”
GGC said about 94 per cent of Canadian grain moves by rail. Besides delayed payments and financial hardship, a strike could cause shipping delays and weakened trade relations.
“We are deeply worried about the impact a strike would have, not just on our operations but on Canada’s reputation as a reliable supplier,” GGC second vice-chair Brendan Phillips said in a statement. “Consecutive supply chain disruptions have already strained our relationships with international buyers. Another stoppage could drive them to seek other markets, affecting us long-term.”
In June 2023, Canada exported more than 2.6 million tonnes of grain. GGC said that illustrates a potential loss of $35 million for each day of a June strike this year.
Sales typically slow weeks ahead of a railway stoppage as shippers and exporters try to minimize costs for vessel wait times and contract penalties, said Wade Sobkowich, executive director of the Western Grain Elevator Association, which represents grain handlers.
“We urge the unions and railway companies to consider the broader impact of their negotiations,” Harpe said.
The Wheat Growers Association called on O’Regan to ensure there is no rail stoppage.