OTTAWA, ONTARIO— Canada is heading toward a rail work stoppage on Aug. 22 if Canadian National (CN) and Canadian Pacific Kansas City (CPKC), two major North American grain handlers, cannot agree on new labor contracts or arbitration with the Teamsters Canada Rail Conference before then.

Amid ongoing negotiations, CN and CPKC have each issued a notice to the union of their intent to lock out workers at 12:01 a.m. on Aug. 22, while the TCRC has served CPKC notice that it will strike on Aug. 22. Canada’s labor minister is expected to meet with the railroads and union over the next two days to try to facilitate an agreement. CN and CPKC already have stopped accepting shipments of hazardous goods and have begun phased shutdowns of operations in Canada.

If there is rail work stoppage, agricultural producers in Canada, particularly of grains and oilseeds, would be heavily impacted, as over 90% of their products move by rail. In 2023, 25% of all value derived from Canada’s agricultural and related product exports to the United States were by rail, averaging over $40 million per day, according to the Foreign Agricultural Service (FAS) of the US Department of Agriculture.

“While Canada has suffered rail interruptions in the past, this is the first time the country has faced closure of both major rail companies at the same time,” the FAS said. “The economic repercussions of rail work stoppage of this magnitude would be devastating locally, and given the interconnectivity, consequently impact the movement of goods in United States and beyond.”

For their part, grain shippers are calling on CN, CPKC, TCRC and the Canadian government to work together to avert a rail work stoppage. The US-based National Grain and Feed Association (NGFA) led members of the Agricultural Transportation Working Group in asking Canadian Prime Minister Justin Trudeau to maintain railroad operations to “prevent serious damage to the Canadian and US economies.”

The livestock industry depends on rail for the timely delivery of feed grains and ingredients, while many facilities, such as biofuels operations, flour mills and other grain processors, require uninterrupted rail service, the groups noted. 

“Operational railroads are essential on both sides of the border for the integrated North American supply chain,” the groups said. “While we believe a negotiated solution is always the preferred outcome, the government should be prepared to move quickly if negotiations fail.”

Wade Sobkowich, executive director of the Western Grain Elevators Association in Canada, earlier this month said a rail work stoppage now would hit just before the start of the fall harvest season and stop virtually all the country’s domestic and export grain flow.

 “The TCRC, CN, CPKC and the federal government need to recognize that their action or inaction will have serious consequences,” he said. “The impacts will be felt mostly by Canadian consumers at the grocery store, both in terms of price and supply. The world needs Canada’s grain now more than ever, and it is unconscionable that anyone would leverage the current domestic and global circumstances to benefit their individual interests.”