Written by Jahnavi Nidumulu and Abhinav Parmar
(Reuters) – Canadian National Railway (CN) and Canadian Pacific Kansas City-based CPKC shut down its railroads nationwide on Thursday, laying off about 10,000 workers after failed negotiations with a major labor union.
The decision, confirmed by the Teamsters Union, paves the way for an unprecedented rail shutdown that could severely damage the Canadian economy and have a major impact on cross-border trade with the United States.
Canada is the world’s second-largest country by area and relies heavily on rail transport. The shutdown is expected to disrupt shipments of grain, potash and coal, and slow the movement of petroleum products, chemicals and cars.
Industry groups have urged Prime Minister Justin Trudeau’s Liberal government to prevent the shutdown, noting that Canada’s railways move C$380 billion ($277 billion) worth of goods annually.
american railroad Union Pacific The New York Stock Exchange said Tuesday that the strike would halt 2,500 cross-border train cars daily.
The Canadian and U.S. economies are highly integrated. According to the U.S. Department of Transportation, rail transportation accounted for 14 percent of the $382.4 billion in bilateral trade between the two countries in the first half of the year.
The stalemate comes after months of talks, with the union and companies struggling to reach agreement on key terms, with each side accusing the other of bad faith.
The union seeks to improve provisions relating to fatigue, rest and scheduling, stressing the need for worker safety.
The national railway company said it had offered better wages and fewer working days, but “the union did not respond”, while CPKC said its offer included competitive wage increases and increased shift differentials.
However, CPKC said a negotiated outcome with the Teamsters Canada Rail Conference (TCRC) union was not within reach, and urged the companies to enter negotiations.
The truckers’ union said the companies had “seriously considered” any of its offers, adding that it would remain at the negotiating table with both companies despite the shutdown.