Canadian Pacific Railway, Union Agree to Arbitration, Ending Work Stoppage

Date: Tuesday, March 22, 2022
Source: The Wall Street Journal

Canadian Pacific Railway Ltd. CP +1.50% and the union representing its conductors and engineers agreed to shift stalled contract negotiations to binding arbitration, freeing the railway to resume freight shipments after a two-day work stoppage.

The agreement follows six months of contract negotiations and mediation with the Teamsters Canada Rail Conference, which represents more than 3,000 conductors, engineers and yard workers at the railway. The union, which seeks increased wages and pension benefits and more rest times, ceased negotiations before its strike deadline Saturday night, prompting the railway to halt shipments of large volumes of manufacturing goods, natural resources and agricultural products.

Canadian Pacific said the agreement enables it to resume freight service at noon local time.

Details of the agreement weren’t disclosed. Binding arbitration typically allows an employer and union representatives to present their contract demands to an independent arbitrator, who then can decide on such terms as wage increases and benefits. In some cases, certain contract terms can be subject to a vote by union members.

The work stoppage at Canadian Pacific threatened to exacerbate delays that are squeezing supplies and raising prices of commodities—including the fertilizer potash ahead of the spring planting season. Canada is a major producer of potash, and the railway transports the bulk of the commodity to ships destined for foreign buyers. Global potash supplies have declined since producers in Russia and Belarus effectively stopped exporting the commodity following Russia’s invasion of Ukraine.

The railway also ships large volumes of Canadian oil, manufactured goods and wheat to the U.S. and other countries. Canadian cattle farmers rely on the Calgary, Alberta-based railway for shipments of cattle feed from U.S. suppliers, a drought in Western Canada last year having reduced domestic supplies.

A number of businesses, customers and politicians have publicly urge the Canadian government to introduce back-to-work legislation that would force striking workers to return to their jobs.

Canadian Labor Minister Seamus O’Regan said he traveled Saturday to Calgary, where he spent much of his time urging union officials to reach an agreement. By Sunday afternoon representatives from Canadian Pacific and the union were discussing potential terms of binding arbitration, people familiar with the matter said.

Canadian Pacific is the sixth-largest freight railway in North America, shipping goods across Canada and south to central U.S. states.


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