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OTTAWA (Reuters) – Canada’s two main railway companies said on Friday they would close their doors to employees on Aug. 22 if talks to negotiate a labour contract fail, a move that would bring freight transport to a standstill in the country.
A strike or lockout could cause significant economic damage to Canada, which relies heavily on its rail network, given its vast geographic location and exports of grain, potash and coal.
Canadian Pacific Kansas City (NYSE:KC), Canadian National Railway (TSX:CNR) and the Teamsters Union agreed last week to resume stalled contract talks with the help of a federal mediator.
Canadian National said in a statement that it had lost confidence in the negotiation process, citing what it called the truckers’ union’s unwillingness to engage in meaningful talks, and had formally asked Labour Minister Stephen MacKinnon to intervene.
There was no immediate comment from MacKinnon, who had earlier urged both sides to continue talks.
Truck drivers, who are unhappy with the rail company’s proposals which they say could put safety at risk, said they would give 72 hours’ notice of any strike.
CPKC previously said it would begin shutting down workers on Aug. 22 to protect Canadian supply chains from more widespread disruptions that could arise if work stops during the peak fall shipping period.
Christopher Monette, a spokesman for the Truck Drivers Association, said the announcement by the Transportation and Transportation Commission was “unexpected and needlessly infuriating,” given that there were 13 days of negotiations before Aug. 22.
