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By CJME

Rail strike worries

Grocery prices, Sask. economy could take a big hit in a rail dispute

Aug 21, 2024 | 7:00 AM

The looming strike and lockout of rail workers could spell trouble for consumers and Saskatchewan’s economy.

The Teamsters representing workers at Canadian Pacific Kansas City have served a strike notice for Thursday while CN Rail has issued a lockout notice for workers also for Thursday affecting 9,300 rail workers.

Sylvain Charlebois, director of Agrifood analytics lab at Dalhousie University in Nova Scotia, said retail prices could increase along with transportation costs as companies look for alternative ways to move goods.

“As soon as you put anything on wheels instead of on rails, you will end up paying more and so that likely would push retail prices higher for many food categories,” he said.

Charlebois also said stores could experience some inventory challenges, especially for cold products like meat, dairy and frozen goods.

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He said it’s difficult to predict exactly how prices will be affected, adding that it requires seven days for the rail system to recover from a single day of disruption.

“If, let’s say for example, there is a labour dispute that lasts seven days — well, we’re in for a long period where there’ll be delays and and procurement will be challenging for many companies,” he said.

Impact on exporting

Charlebois said the dispute could damage Canada’s reputation as a trading partner and he has long argued that the food chain is an essential service that shouldn’t be disrupted.

Chris Dekker, CEO of Saskatchewan Trade and Export Partnership said the pending strike and lockout would have immense effects on the province’s economy.

“Because we have such a relatively small population … we have to rely on shipping the vast array of products and services we produce in Saskatchewan to markets around the world,” Dekker told 980 CJME on Tuesday.

“In fact, we’re one of the most export-dependent provinces and one of the most export-dependent countries in the world.”

Dekker explained that Saskatchewan relies heavily on export infrastructure like roads, railways and pipelines since it is a landlocked province

“Any disruption of that critical infrastructure could be very detrimental to Saskatchewan’s economy and Saskatchewan’s farmers, producers, manufacturers and business people,” he said.

Dekker said the export of large volumes of grain, oil seeds and oil would be impacted by any rail dispute, and manufactured and processed goods — such as lumber, OSB wood, pulp and manufactured agriculture equipment — would also be affected.

He said he believes rail is an essential service and supports Premier Scott Moe in urging the Government of Canada to actively facilitate a fair resolution while exerting all “legal and possible” policy pressures to prevent a work stoppage.

Saskatchewan Premier Scott Moe said Tuesday the only option to keep the “inevitable” halt moving is for the federal government to put in a binding arbitration mandate.

“We want to ensure that the folks that are working on the rail lines are being treated fairly as well,” Moe said. “But we do need the service, and we need it desperately.”

Moe said Saskatchewan exports $50 billion worth of resources a year, mostly travelling out of the province through the rail lines.

He said imports could also suffer, pointing to shipments of chlorine coming into the province.

“Both the exports and imports will be affected by this strike that is already essentially underway with rail lines already starting to stop trains coming into Canada,” Moe said. “They are starting to ramp down for what seems to be inevitable, and that’s so very unfortunate.”

Moe said the provincial government is working to get the federal government, the rail companies, and the union representing it to use any tools available to prevent a work stoppage.

“This is a critical service for all of us,” he said.

Saskatchewan Trucking Association says roughly 70 per cent of the province’s imports are moved by rail and 30 per cent are moved by truck. (File photo/ CJME)

Concern in mining, trucking sectors

The Saskatchewan Mining Association called on the federal government to take action through binding arbitration in a Tuesday media release

“Rail is the only way to transport bulk tonnage product to export markets,” the release read. “Labour disruption results in production stoppage at potash mine and mill facilities.”

In another media release sent on Tuesday, the Saskatchewan Trucking Association (STA) expressed similar concerns and called on “all stakeholders” to take immediate action to prevent a full-scale supply chain disruption.<

“The strike’s impact is not limited to exports; it also threatens the supply of dry goods and groceries within the province,” the release stated. “With rail services potentially halted, trucking carriers will struggle to keep up with the demand.”

The STA said roughly 70 per cent of the province’s imports are moved by rail and 30 per cent are moved by truck.

Also on Tuesday, the rural municipality associations of Saskatchewan, Alberta and Manitoba urged the federal government to find a quick resolution.

“The Rural Municipalities of Alberta (RMA), Saskatchewan Association of Rural Municipalities (SARM), and Association of Manitoba Municipalities (AMM) are urging Steven MacKinnon, federal Minister of Labour, to order binding arbitration if the railways and union are unable to reach an agreement prior to Thursday, when labour disruptions would begin,” the release said.

“Even a short-term work stoppage will have massive impacts on the agriculture sector, which already struggles to access rail cars to move harvests to market.”

— with files from Gillian Massie and Canadian Press