Canada’s freight trains will soon be rolling again. Here’s what you should know

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Canada’s two largest railway companies are expected to resume train service soon after the government intervened and ended a service shutdown triggered by a labour dispute.

After Canadian National and CPKC failed to reach new agreements with the Teamsters Canada Rail Conference union by a deadline early Thursday evening, both railroads locked out their workers – bringing all rail traffic in Canada and shipments to the United States to a halt. But less than a day after this complete blockade began, the Canadian government ordered both railroads to enter binding arbitration.

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Labour Minister Steven MacKinnon expects trains to be running again within a few days. The union, which represents 10,000 train drivers, conductors and dispatchers, reacted angrily to the order and accused CN and CBKC of deliberately creating a crisis to force government intervention. Their picket lines remain in place.

Here’s what you should know:

What led to the shutdown on Thursday – and how did it happen?

It boils down to an employment contract dispute and subsequent government intervention.

Railroads CN and CPKC locked out their employees after a deadline to resolve a dispute with the Teamsters Canada Rail Conference passed at 12:01 a.m. EDT without an agreement. As a result, all trains in Canada stopped running, as did shipments crossing the U.S. border. This could mean significant economic damage to businesses and consumers in both countries that rely on billions of dollars worth of goods transported by rail each month.

Both sides negotiated unsuccessfully throughout Thursday while workers went on strike outside the building. Business associations called on the government to force arbitration.

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Prime Minister Justin Trudeau initially refused to force the parties into binding arbitration for fear of angering unions and the left-wing NDP, whose support his Liberal government relies on to stay in power. But late in the afternoon, the government changed its stance when MacKinnon announced the decision to order arbitration.

MacKinnon, who had rejected arbitration a week ago, said the government wanted to give the negotiations every chance of success – but ultimately the economic risk was too great to allow the lockouts to continue.

“Collective bargaining is always the best way forward,” Trudeau later said in a post on X. “When that is no longer a foreseeable option – when we face serious consequences for our supply chains and the workers who depend on them – governments must act.”

Both CN and CPKC welcomed the decision and said the government had no other choice. But Teamsters Canada Rail Conference President Paul Boucher sharply criticized the order.

“Canada’s two major railroads have created this crisis, held the country hostage and manipulated the government to once again disregard the rights of Canada’s working class,” Boucher said, adding that the union was “deeply disappointed by this shameful decision.”

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What happens next?

CN said the lockout ended immediately Thursday evening so trains could be returned to service as soon as possible. CPKC railway said in a statement it would follow the instructions of the Canada Industrial Relations Board, which is overseeing the arbitration process, but did not say exactly when the lockout would end.

MacKinnon had previously stated that he expected the trains to be running again within a few days. Ending the lockouts would be the first step.

The Teamsters Canada Rail Conference, meanwhile, said picket lines would remain in place while the union reviewed the formal arbitration decision and decided on next steps.

Most Canadian rail outages have lasted only a day or two and usually only affected one of the major railroads. However, some have lasted up to eight or nine days. This time, the impact was even greater because both railroads were shut down.

Were companies and travelers affected?

Every month, billions of dollars worth of goods are transported by rail between Canada and the United States. And although the end of the lockouts is near, some consumers and businesses were already feeling the impact on Thursday.

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More than 30,000 commuters in Vancouver, Toronto and Montreal were the first to feel the impact of the lockouts. They may have to take the bus again on Friday. Their commuter trains cannot run while CPKC dispatchers are locked out.

Most companies probably have enough supplies and storage space for finished products to survive a short disruption, but ports and other rail lines would quickly become clogged with stranded shipments that CN and CPKC do not pick up.

Chemical companies and food retailers would have been the first to be affected. Railways stopped accepting new shipments of hazardous materials and perishable goods as they gradually wound down operations last week in anticipation of the full shutdown on Thursday. Most chemical plants, however, had said they would be able to operate without problems for about a week.

The auto industry was also preparing for potential shortages. General Motors, Stellantis, Ford, Honda and Toyota either assemble entire vehicles in Canada or ship engines and other components across the border. About 80 percent of vehicles assembled in Canada are shipped to the U.S., mostly by rail. Michael Robinet, executive director at S&P Global Mobility, explained that most auto assembly plants operate with “just-in-time” inventories of parts – making it difficult to build up supplies for more than a few weeks.

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Funk reported from Omaha, Nebraska. Associated Press writers Wyatte Grantham-Philips in New York and Tom Krisher in Detroit contributed.

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