CP Rail lockdown: what it may mean for Canada’s supply chain

A labor dispute at CP Rail threatens to further cripple the flow of goods at a time when supply chains are already strained due to the COVID-19 pandemic and the Russian invasion of Ukraine.

Canadian Pacific Railway Ltd. issued a 72-hour notice to the Teamsters Canada Rail Conference on Wednesday, planning to lock out nearly 3,000 employees if the union and the company fail to reach a negotiated settlement or to binding arbitration.

The two sides disagree on 26 outstanding issues, including wages, benefits and pensions.

On Thursday, the Calgary-based railroad said it received strike notice from the union representing its engineers, conductors and other train workers in the latest escalation in the labor dispute that could lead to a potential work stoppage at the nationwide on Sunday morning. Morning.

However, the disruption to Canada’s freight capacity could still be avoided as CP Rail and the union say they are determined to negotiate until the deadline.

Canadian trade organizations and industry experts are calling on Ottawa to prevent a potential work stoppage, saying it could further hamper the resumption of trade following COVID-19 restrictions and supply chain issues. ‘supply.

IMPACT ON CANADIANS

Farmer groups have warned that any delays to rail lines could lead to production cuts that will affect everything from shipments of fertilizers and other inputs during the spring planting season to emergency food deliveries for livestock in drought-affected areas of the prairies.

“At a time when there are significant global disruptions in the movement of goods, this labor disruption would directly harm Canada’s ability to act as a reliable source of agricultural products for global consumers,” said Thursday. the Canadian Federation of Agriculture in a press release.

“Disruptions like this can ripple and have consequences across the entire food supply chain.”

If there is no rail capacity to transport goods, experts say the work stoppage would cause prices to rise, especially at groceries.

“Make no mistake about it, this is a labor dispute the world cannot afford,” Sylvain Charlebois, professor of distribution and food policy at Dalhousie University, told CTV National News.

As the Canadian economy grapples with inflation, supply chain issues caused by the COVID-19 pandemic have already driven up the cost of food and other household items. Now, Russia’s invasion of Ukraine threatens global wheat supplies and adds to rising gas prices at the pump.

Charlebois said if the work stoppage at CP impedes Canada’s rail movement for long enough, Canadians will not only see a price increase, but there will be product shortages.

“We could actually see empty shelves. We may see some grocers struggling to get produce to feed Canadians,” he said.

Retail expert Heather Thomson told CTV National News the impact of a potential rail shutdown could be significant.

“It could lead to even higher inflation, longer delays. It could be a very big blow to the Canadian economy,” she said.

Thomson added that Canadian consumers should prepare for the impact and adjust their budgets accordingly.

With files from The Canadian Press and CTV Alberta bureau chief Bill Fortier

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