By Robb M. Stewart


OTTAWA--The clock is again ticking on a possible walkout at Canada's two large rail operators after the country's labor relations board agreed there was no need to maintain any essential services in the event of a strike or lockout.

The Canada Industrial Relations Board in a ruling Friday determined a work stoppage at Canadian Pacific Kansas City and Canadian National Railway didn't pose an immediate or serious danger to safety or public health. It ordered a 13-day cooling-off period between the rail companies and Teamsters Canada Rail Conference.

The decision puts the rail companies and the labor union back where they were in early May before the federal government averted a possible widespread disruption to the movement of goods across the country and cross-border trade when it asked the board to rule on possible safety risks and whether the railroads must transport certain goods during strike or lockout.

Teamsters Canada, which represents close to 10,000 workers at the companies, said if a settlement can't be reached the earliest a work stoppage can occur is after midnight Aug. 22.

Leaders from the union and the railroads agreed Monday to restart stalled negotiations this week alongside federal mediators. Labor Minister Steven MacKinnon at the time said the government expected the talks to be productive and substantive, given the country has entrusted the companies and their workers with transporting close to 400 billion Canadian dollars (US$291 billion) in goods annually.

Teamsters members in May voted overwhelmingly to strike.

In a letter Friday to Prime Minister Justin Trudeau and other lawmakers, the Canadian Chamber of Commerce urged Ottawa to intervene to avert a rail shutdown it warned would have an immediate impact on thousands of businesses, commuters in several major cities and would leave Canadians with access to fewer goods and drive up prices.

The industry body said Canadian railways account for half of the country's exports. A prolonged railway strike, on top of near-term disruption, could damage the country's international reputation and weaken its negotiating position in advance of the renewal of the Canada-United States-Mexico Agreement in 2026, it said.

In a statement posted on X, Minister MacKinnon on Friday called on all sides to remain at the bargaining table. "A negotiated agreement is the best way forward," he said.

In its decision the labor relations board said the companies and union were best placed to determine what threat a strike or lockout posed, given Canadian Pacific has experienced five separate work stoppages since 2012 and Canadian National has faced one strike in the last 15 years that lasted eight days. The rail companies and the union have agreed that none of their services or activities needed to be maintained during a work stoppage.

The board said a work stoppage at the railways would result in inconvenience, economic hardship and possibly harm to Canada's international reputation as a reliable trading partner, but those weren't factors it had to consider when tackling the government's call to rule whether safety would be at risk.

Paul Boucher, president of Teamsters Canada, said the government in suspending any possible strike had robbed the union of leverage and neither company has been willing to compromise or show flexibility in their demands, which he described as the sticking points rather than any union proposals. He said the union was focused on reaching agreements at the bargaining table, and would provide 72 hours advance notice in the event of any strike.

Teamsters Canada is bargaining for the renewal of two collective agreements covering 3,200 so-called running trades employees and a unit of 85 rail traffic controllers at Canadian Pacific and the renewal of a collective agreement covering about 6,000 railway transportation employees at Canadian National. The union said both companies want concessions on issues pertaining to crew scheduling, rail safety and fatigue management.

Railways have long been a key element in Canada's economy, hauling goods including grain, fertilized and coal across vast distances.

Canadian Pacific earlier in the week said it had made offers to the union providing significant benefits to employees while complying with new regulatory requirements for worker rest. It reiterated an offer to resolve the dispute through binding arbitration should negotiations be unsuccessful.

Canadian National said it too had made multiple offers to Teamsters Canada that it believed addressed employee issues.


Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

08-09-24 1520ET