November 25, 2019 / 1:05 PM / 11 days ago

Canada's biggest rail strike in a decade hits exports, sparks layoffs

OTTAWA/MONTREAL (Reuters) - A strike at Canadian National Railway Co, the country’s largest railroad, entered a seventh day on Monday, sending further shocks through the economy with grain shipments scuttled and layoffs planned at fertilizer producers and an auto shipment terminal.

Farmers with tractors take to the streets as they protest the lack of propane due to the Canadian National Railway (CN Rail) strike in Montreal, Quebec, Canada November 25, 2019. REUTERS/Christinne Muschi

As Canada’s biggest rail strike in a decade dragged on, industry has piled pressured on the government to intervene. Teamsters Canada, the union representing the 3,200 striking CN employees, said it was no closer to an agreement than when its members first hit picket lines.

The Unifor labor union said 70 employees would be laid off effective Thursday at a Nova Scotia facility contracted by CN to handle vehicles shipped in and out of Canada.

Meanwhile, frustrated farmers facing propane shortages dumped wet corn in front of the prime minister’s local Quebec office and pleaded for the government to step in.

Striking conductors and yard workers are demanding improved working conditions, including worker rest breaks.

The Teamsters released a recording of what it called an exchange between an exhausted conductor who wanted regulator Transport Canada to intervene before agreeing to a manager’s request to move a train after a 10 hour shift. The union said its contract requires rest after 10 hours of work.

CN said Monday it is aware of the recording and is “looking into” the matter. Reuters could not verify the recording.

Transport Canada, which requires railway workers to rest after a 12 hour shift, said it had not received a complaint regarding the case.

Canada relies on CN and Canadian Pacific Railway to move products like crops, oil, potash, coal and other manufactured goods to ports and the United States. Industry figures show about half of Canada’s exports move by rail, and economists have estimated a prolonged strike could eat into economic growth.

The federal government has sidestepped industry calls to force employees back to work, insisting collective bargaining is a quicker solution.

CN said its officials continue to negotiate and called for binding arbitration, a demand the union has rejected thus far.

VESSELS PILE UP

The strike left at least 35 vessels waiting at Canada’s West Coast to load grain shipments, Mark Hemmes, president of Quorum Corp which monitors the movement of prairie grain for the Canadian government, told Reuters. Hemmes said many of the grain handling facilities at major ports on the West Coast are serviced only by CN.

Shipments from those ports supply international markets, including Asia.

An association of Canadian exporters has declared event of delay, allowing members to avoid contract penalties due to circumstances outside their control.

Nutrien Ltd said it was preparing to shut down its largest potash mine, at Rocanville, Saskatchewan, for two weeks effective Dec. 2. The north shore of Port of Vancouver’s Burrard Inlet is home to a major potash and coal export terminal as well as grain terminals operated by Cargill and Richardson International that are normally serviced only by CN.

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A “trickle of cars” from CP was reaching the grain terminals, but they are “for all intents and purposes shut down,” said Wade Sobkowich, executive director of the Western Grain Elevator Association. Cargill Ltd spokeswoman Connie Tamoto said the company had taken “mitigation measures” to ensure customer needs are met. Richardson International did not respond to requests for comment.

Around 300 farmers, angry at a shortage of propane they need to dry grain, gathered with a dozen tractors near Prime Minister Justin Trudeau’s parliamentary office in Montreal on Monday to demand government action to end the strike. Some farmers held bags of grain and signs that read “To dry grain, you need propane.” CN is a key link in transporting propane to parts of Eastern Canada where it is also used to heat homes and hospitals.

(This story refiles to correct spelling in headline)

Reporting by Kelsey Johnson in Ottawa, Allison Lampert in Montreal and Arunima Kumar in Bengaluru; additional reporting by Rod Nickel in Winnipeg, David Ljunggren in Ottawa and Christinne Muschi in Montreal; Editing by Chris Reese, David Gregorio and Richard Pullin

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