Canadian rail lockout leaves billions in U.S. trade stranded

Canada’s Labor Minister Steven MacKinnon announced at a press conference on Thursday that he had directed the Canada Industrial Relations Board (CIRB) to review his request for binding arbitration and the immediate resumption of rail operations.

Those familiar with negotiations told CNBC the railroads have been each asked to participate in separate case management conferences with the CIRB tonight.

The highly integrated trade relationship between the Canadian and U.S. economies has left billions worth of cargo in limbo after over 9,000 freight rail workers represented by the Teamsters Canada union were locked out by Canadian National Railway (CN) and Canadian Pacific Kansas City (CPKC) after months of failing negotiations.

MacKinnon’s office told CNBC that the CIRB gets to decide whether to move forward with the request.

“Negotiated agreements have and always will be the best way forward,” a statement from MacKinnon said. “Collective bargaining is how the strongest, longest lasting deals are made – deals that are good for unions and employers alike.”

MacKinnon said at the press conference that he was “confident” the CIRB would accept his referral.

CNBC has reached out to CIRB for comment. MacKinnon’s office told CNBC that it can take up to 24 hours for the CIRB to announce its decision.

Shortly after MacKinnon’s comments, both Canadian railroads announced their plans to restart operations.

CN told CNBC they have ended their lockout. In a statement, the company wrote, “While CN is satisfied that this labor conflict has ended and that it can get back to its role of powering the economy, the Company is disappointed that a negotiated deal could not be achieved at the bargaining table despite its best efforts.”

CPKC said it was preparing for a “safe and orderly resumption” of operation and “will follow the order of the CIRB once it executes the Minister’s direction.” They have not lifted their lockout.

“The Canadian government has recognized the immense consequences of a railway work stoppage for the Canadian economy, North American supply chains and all Canadians,” said Keith Creel, CPKC president and CEO. “The government has acted to protect Canada’s national interest. We regret that the government had to intervene because we fundamentally believe in and respect collective bargaining; however, given the stakes for all involved, this situation required action.”

Those familiar with negotiations told CNBC the railroads have been each asked to participate in separate case management conferences with the CIRB tonight.

The Teamsters Canada Rail Conference told CNBC that picket lines would remain in place while they reviewed MacKinnon’s referral and the CIRB’s response and consulted with their legal counsel to determine next steps. “By resorting to binding arbitration, the government has allowed CN and CPKC to sidestep…