The Railway Association of Canada (RAC) has released a report on work stoppages in Canada, highlighting “the impacts of labor uncertainty on Canada’s GDP, workers’ earnings, and trade, and the outsized impacts of stoppages in the rail industry.” It calls for the Canadian government to adopt something similar to the Railway Labor Act and National Mediation Board, which for the most part have been able to avert railroad worker strikes in the U.S.
The report, The Significant Impacts of Work Stoppages in Canada’s Transportation Sector (download below), notes that “recurring labor disruptions are a major threat to Canada’s supply chains and its reputation as a reliable trading partner. Disruptions in transportation industries, such as rail, ports, aviation and trucking, have far-reaching effects that extend beyond thedirectly involved employers and bargaining employees. Labor disputes in these critical sectors can stall the broader Canadian economy, impacting key industries including agriculture, automotive manufacturing, construction, natural resources and more.”
“As an export-driven nation, Canada is particularly vulnerable to disruptions in its transportation supply chain, and rail sector disruptions cause some of the largest impacts,” RAC points out. “Canadian railways transport approximately C$380 billion worth of goods each year, or roughly C$1 billion per day. In August 2024, Moody’s Corporation estimated that a work stoppage at both CN and CPKC could have a C$341 million per day impact on the economy.”
RAC says the report “makes an important contribution to the existing literature by comparing the relative economic impacts of work stoppages in different transportation industries. The results show that, on average, GDP losses from work stoppages in rail are roughly ten times larger than work stoppages in trucking and about 20 times more significant than in aviation. Nearly two-thirds of the unrecoverable GDP losses from rail work stoppages fall on other, non-rail sectors. In 2024, the transportation and warehousing sector experienced the greatest number of person-day not worked (from work stoppages) since 1966. In the wake of multiple damaging work stoppages across critical Canadian supply chains, affecting workers in several industries, Canada must consider alternatives to the current Canada Labour Code process to protect supply chain reliability while respecting collective bargaining.”
RAC says the U.S. Railway Labor Act “offers a model that begins the mediation process before a work stoppage may happen, using the National Mediation Board as a third-party arbitrator. The flow of business can continue under the original contract until an agreement is reached, which avoids harming the wider supply chain. The Canada Labour Code should be amended to grant the federal cabinet authority to compel binding arbitration instead of requiring a Ministerial reference to the Canada Industrial Relations Board (CIRB) once a stoppage begins. With such an amendment to the Code, the collective bargaining process would still be respected and preferred, as the best agreement is one that is negotiated between all parties.”
A resilient transportation network is essential for Canada’s economic growth and global competitiveness, particularly amid the evolving trade war with the U.S.,” RAC adds. “Work stoppages erode investment confidence, risk long-term supply chain shifts to U.S. routes, and, of course, undermine Canada’s standing as a stable trading partner.”
