Canada's two national railways are set to start moving again after a day-long lockout and strike, but while the reversal is meant to expedite the country's economy, one expert says there could be congestion costs involved.
CN Rail ended its lockout of employees Thursday afternoon (Aug 22) and "immediately" initiated a recovery plan following an 18-hour strike and lockout, according to an emailed statement. It's awaiting the formal order from the Canada Industrial Relations board, but the decision was made to "expedite the recovery of the economy."
Canadian Pacific Kansas City, meanwhile, says it’s preparing to restart operations and will provide further details about timing once it receives an order from the board to impose final binding arbitration.
CN and CPKC's plans come after federal Labour Minister Steven MacKinnon said he would be intervening to get the trains moving again after the unprecedented lockout by the country's two largest rail companies.
MacKinnon will be using his powers under Section 107 of the Labour Code to ask the Canada Industrial Relations Board to impose final, binding arbitration. He has also asked the board to order the railways to resume operations under the terms of the current collective agreements until new deals are in place.
Depending on the length of the strike, it could have been disastrous for B.C.'s economy.
But after less than a day, what kind of impact could this strike have on the province's economy and beyond?
University of British Columbia professor emeritus Trevor Heaver said companies most likely prepared themselves for a strike as well as they could.
"Exactly how long, what preparation they were able to undertake, what range of options they had and how far down that range of options went would depend of how long they expected the strike to last," he said, following CN and CPKC's announcements.
"Companies for whom rail service was important – and that's the bulk of our export trades ... they would have built up some inventory to tide them through."
Heaver said companies might have tried, or been forced to, tap into alternatives, but that is for long-run service and cost protection. However, he said building that flexibility could come at a bit of a cost.
He also said he expects there could be ongoing congestion costs.
"The railways did stop operations. They did delay the receipt of certain products, and there's going to be congestion as everybody tries at the same time to get their systems back in the normal working condition."
Canadian Pacific Kansas City (CPKC) and CN Rail formally locked out 9,300 engineers, conductors and yard workers represented by the Teamsters Canada Rail Conference just after 9 p.m., Pacific Time, on Wednesday.
CPKC said in a statement shortly after the lockout that it has "remained committed to doing its part to avoid this work stoppage," bargaining in good faith. Despite "best efforts" is was clear that a negotiated outcome with the Teamsters was not within reach.
CN Rail said in its statement that it had "no choice but to finalize a safe and orderly shutdown and proceed with a lockout" after nine months of negotiations.
Teamsters president Paul Boucher said that throughout the process CN Rail and CPKC have "shown themselves willing to compromise rail safety and tear families apart to earn an extra buck."
In B.C., the Mission-to-Vancouver commuter West Coast Express shut down and rail yards from Williams Lake to Port Coquitlam were at a standstill.
As CN and CPKC prepare to get back up and running, Heaver said companies have become more versatile in the wake of shutdowns such as during the COVID-19 pandemic or the flooding in 2021.
"The saying is, don't put all of your eggs in one basket. And the reason you don't put all of your eggs in one basket is to have flexibility when something goes wrong."
The extent of how much they can do that, he said, depends on the business.
Black Press Media has reached out to CPKC and Teamsters Canada for comment.
– With files from The Canadian Press
