CP Rail strike could be ‘harmful’ to Canada’s economy, experts warn

With CP Rail trains halting in the country and thousands of workers starting to march picket lines, the expected strike at Canada’s second-largest railway operator came at one of the worst times for agriculture, experts say.

“The hit on the Canadian economy that could cause this is so damaging,” Richard Powers, associate professor at the Rotman School of Management at the University of Toronto, told Global News. “I do not know what else we can face without seeing a real collapse.”

The strike, with nearly 3,000 engineers, conductors and other train crews, came into effect early Sunday morning after a blockade initiated by the Calgary-based railroad.

After the blockade, the Teamsters Canada Rail Conference said workers were also on strike, with picketing at several Canadian Pacific locations. This is the fifth work stoppage since 1993, according to CP Rail.

There are 26 exceptional issues, including wages, benefits and pensions, that are currently causing unrest between the two sides. While both parties are still at the table with federal mediators, significant negotiations are still pending. Powers did not see the conflict coming to an end before Friday.

“It seems like there are still a lot of issues to discuss and agree on. A strike coming at this time, it just adds to the confusion and chaos,” Powers said, noting that the clash from the heels of COVID -19 Pandemic in Russia came the invasion of Ukraine, which has already drastically affected the economy not only in Canada but all over the world.

For Canadians, everything from agricultural and farm products to fuel and vehicles is affected, according to Powers.

“Moving parts is so important and now you just cut it off,” he said.

According to Dennis Darby, president of the Canadian Manufacturers and Exporters Trade Association, a survey conducted between February 8 and February 28 found that nine out of ten Canadian manufacturers face supply chain problems.

He said Canadian manufacturers have already lost an estimated $ 10.5 billion in sales due to disruptions to the transportation network and they could easily afford another disruption.

“In addition to our concern, the fact that a work disruption at CP Rail is another blow to Canada’s reputation as a good place to do business and as a reliable supply chain partner,” Darby said.

The grain industry, in particular, is expected to feel the impact of the strike.

“We have those waiting for the West Coast harvest, feed-lot operators waiting for product, processing plants across the prairies and in eastern Canada and needing canola and grain to provide bread for the business shelves. And we seen inflation rise, “Western Grain Elevator Association spokesman Wade Sobkowich said last week.

“Everything comes at us all at once. There are some things we can control and some things we can not. We should be able to control a work stoppage and yet we stand here with one. This is the last thing we do now. need in the grain sector and as an economy here in Canada.

Sobkowich said that about half of the annual grain crops are exported to CP railway lines. He said the average crop size is between 30 and 40 million tonnes.

The beef industry could also be affected as CP Rail corn is imported to feed cattle across the nation, said Opher Baron, professor and academic director of the University of Toronto’s Rotman School of Business, Global News.

“They basically feed the beef industry in Canada,” he said, noting that much of the land transport is done on rails.

Canadians could pay more if they bought food, clothes and more, depending on how long the strike lasted, according to Baron.

“This strike is not a small pool. It is potentially a big one. It can have a relatively large effect,” he said.

Also in the US, the CP railroad conflict interrupted fertilizers and other shipments to and from the country.

The Canadian Pacific covers much of the US Midwest and is a major shipper of potassium and fertilizer for agriculture. It also carries grain from the United States to its northern neighbor for domestic use and export. The railroad serves Dakotas, Minnesota, Iowa, Illinois, Wisconsin, Missouri and other states, according to a map on its investor website.

The Canadian Pacific is also operating in New England and upstate New York, said CP spokesman Patrick Waldron.

CP received 29 percent of its 2020 freight revenue from cross-border shipments between the U.S. and Canada, says its investor website.

According to Powers, the federal government must “look back at labor legislation” to start the Canadian economy. However, he added that this type of measure is rarely used in Canada because it is an affront to the collective bargaining process.

“We have to respect the process. Let’s give them a chance. But at the same time, they have to recognize that at some point things have to change,” he said.

– With files from Global News Sean Boynton, Connor O’Donovan and The Canadian Press