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By Nick Nielsen

Binding arbitration

Sask resource industry relieved to avert rail labor dispute

Aug 22, 2024 | 5:00 PM

Canada’s two largest railroads will roll their trains again after the government intervened to end a shutdown that arose from a labor dispute. After Canadian National and CPKC failed to reach new agreements with the Teamsters Canada Rail Conference union by an overnight deadline early Thursday, both freight railroads locked out nearly 10,000 of their workers halting all rail traffic in Canada and shipments into the U.S. But, less than a day into the impasse, the Canadian government ordered both freight railroads to enter binding arbitration on Thursday. Labour Minister Steven MacKinnon expects trains to be running again within days.

To mitigate the potential impacts of the impending rail stoppage, Paper Excellence – the company that owns Meadow Lake Mechanical Pulp and the currently shuttered Prince Albert Pulp Mill– built inventory, secured additional warehousing and planned to increase the use of trucks. Spokesperson Leo Makowski said the company was anticipating major impacts to their industry. Now, they’re breathing a sigh of relief.

“It’s important to recognize even when this is settled, its going to take time afterwards to restore service for manufacturing companies like us,” said Makowski. “It impacts us on both ends – products incoming that we need to use to manufacture products and then of course products going to our customers.”

Saskatchewan Premier Scott Moe said the federal government took appropriate action in imposing binding arbitration to end a labour stoppage. On social media, Moe said the move will ensure Canadian products are again moving to market.

The brief lockout showed just how dependent the province’s natural resource sector is on the country’s rail lines.

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Pam Schwann is the President of the Saskatchewan Mining Association. She told paNOW that just one day of rail shutdowns can have a significant impact on the mining industry.

“Usually, it takes five to seven days for every day of strike for recovery, for the rails to get back online and serving their customers at the rate that they were previously,” said Schwann.

Potash is one of the minerals that could have suffered the most from a prolonged rail strike. While other minerals can be left on ground for long periods of time, potash is water soluble and will degrade if it gets wet.

“The companies have all taken steps to increase their storage capacity and allow the round of investments they made in their facilities, but it is limited to five to seven days of storage at each site. Once the storage for potash is used up, production will have to be curtailed so they just can’t keep producing potash because there’s simply no place to put it.”

Potash is moved out of province every single day; Saskatchewan produces more than anywhere else in the world, over doubling the production of the next closest producer, Russia. Schwann said the labour dispute could have resulted in losing international partners quickly.

“For every ton of potash that we don’t sell, there’s someone that wants to make that sale. Last year during the labor disruption on the West Coast, we lost our number one position in selling potash to a country like Malaysia to Russia. So, for every ton of potash we don’t sell, Russia’s going to sell it to our customers. They’re not waiting for Canada to get its labor negotiations and labor contracts settled, they just want to get their product and if it’s not going to come from Canada, it’s going to come from somewhere else.”

It’s not just what’s going out of the mines in Saskatchewan, the dispute could have also affected what’s going in. Schwann said mining operations rely on the rail for bringing in supplies and heavy equipment to operate.

“The rail lines are absolutely the backbone of the Canadian economy. We’re an export based economy and if that spine is broken, it’s going to take a while to heal.”

Carlton Trail Railway (CTRW) operates from Saskatoon to Prince Albert, over 103 miles of former CN track. It doesn’t provide help to the mining sector, but it does the forest products industry by transporting lumber from the Prince Albert area to destinations across North America. It also supports the grain and special crops industry including primary elevators and a pulse processing plant. When asked how the rail stoppage may affect them, an employee told paNOW they were in a ‘wait and see’ scenario since part of their operation includes hauling rail cars to CN.

Now that the Liberal government decided to send the railway dispute to binding arbitration, natural resources industries in Saskatchewan and those that serve them, like CTRW can also breathe a sigh of relief.

*with files from the Canadian Press

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nick.nielsen@pattisonmedia.com