U.S. – Canada Rail Disruption Appears Likely

Aug. 16, 2024
By: Chaney A. Finn

International rail traffic between the U.S. and Canada is expected to be disrupted as soon as August 22, 2024, as Canadian National Railway has began refusing commodities that could be hazardous if stranded on the tracks in the event of a work stoppage. The Canada Industrial Relations Board (CIRB), which hears and decides complaints, applications and appeals alleging non-compliance with labor, occupational health and safety and employment laws in federally regulated workplaces also ruled that no “serious danger” would be posed to public health or safety should a work stoppage occur, as there were concerns regarding impact to food security, fuel supply and water treatment. CIRB’s ruling signals to all parties involved that a work stoppage is permitted, should there not be an agreement between labor and management by the 22^nd.

The embargo on hazardous commodities is the first step in a process of phased shutdown of the rail network. Current embargoed commodities include chlorine, used to purify drinking water; bromine, used as a cleaning agent; ammonia, used as fertilizer; chloropicrin, a fungicide used on stored grain; and ethylene, used as anesthetic, a refrigerant, and to make other chemicals. The embargo will expand to other commodities that would pose a safety hazard if left unmaintained on the tracks if progress is not made in contract talks or negotiations do not head to arbitration.

Suspended operations and the halting of cross-bordar rail trade between Canada and the U.S. would be the expected outcome of a work stoppage. Industries that depend on reliable rail service, particularly the agriculture sector, are calling for a quick resolution to reduce the impact the disruption will have on supply chains and the economy. Canadian Labor Minister, Steven MacKinnon, is urging good-faith negotiations to continue up to and through a potential work stoppage of all parties to reach a timely resolution to this dispute.

The potential work stoppage involves 9,300 engineers, conductors and yard workers represented by the Teamsters Canada Rail Conference working at one of two rail carriers, Canadian National Railway Company (CN) and Canadian Pacific Kansas City (CPKC). The potential disruption was set in motion back in February when CN and CPKC filed a notice of dispute with the Federal government, which began the legal process of a work shutdown. A union vote in May concluded unanimous support in favor of striking among members. Negotiation pain points pertain to crew scheduling and safety concessions due to labor shortages in the industry, resulting in more being demanded from the crew to continue operations.

Should you have any questions regarding international trade compliance, do not hesitate to contact any attorney at Barnes, Richardson & Colburn, LLP.