From meat to car and gas shortages, here's how rail work stoppages may impact Canadians

Trains are seen in an aerial view of the Canadian Pacific Kansas City rail yard in Port Coquitlam, B.C., Aug. 19, 2024. THE CANADIAN PRESS/Darryl Dyck

As an unprecedented work stoppage at Canada's two largest railways begins, Canadians are bracing for its consequences — from a hit to their pocketbooks to a potential shortage of meat, cars and gas.

Canadian Pacific Kansas City (CPKC) Ltd. and Canadian National Railway Co. (CN) locked out 9,300 unionized workers Thursday morning after a contract couldn't be reached with the Teamsters Canada Rail Conference. As more than half of the country's exports travel by rail, carrying more than $1 billion worth of goods each day, labour disruption at both companies could spell trouble for Canadians.

In anticipation of the lockout earlier this week, both major railways halted shipments that need cooler temperatures, such as meat. A continued interruption in service will cause “unprecedented damage” to Canada’s meat industry, according to Canadian Meat Council CEO Chris White, with some processing plants anticipating losing up to $3 million per week.

For Canadians, such a disruption to the meat industry could be reflected on grocery store shelves, says Daniel Tsai, a lawyer and business professor at Toronto Metropolitan University who is also the editor of ConsumerRights. “I think effects could be within a week, maybe two weeks,” he says. “You may not see it in the pocketbook right away, but over the course of time, you're going to start seeing shortages and probably price increases.”

The work stoppage could also impact the auto industry, Tsai adds, as both railway companies distribute automobiles and auto parts to major population centres across Canada and the U.S. Midwest. This could mean longer wait times for cars to be delivered, especially if there is a supply chain backup.

If a consumer has any concerns about delays, whether it’s for a car or another product, Tsai suggests they inquire and be aware of what the shipping times are. “If there are certain things that can be only transported through rail, try to get an accurate estimate and see if there’s an alternative cost-effective way to have it shipped,” he says, adding that the earlier you do this, the better. “You can then decide if it’s worth an additional cost.”

At the end of the day, Tsai expects a work stoppage will hurt people’s pocketbooks. He warns that because railways also transport large amounts of Canadian oil, there could be the potential for gas shortages, too.

In addition, the outcome of a work stoppage will be “really painful” for many small businesses who rely on rail to send or receive their products, Canadian Federation of Independent Business vice-president of national affairs Jasmin Guénette tells CTV.

“There's not any plan B available for businesses. It's not like suddenly they can call up a trucking company and ask for their goods to be picked up,” he says. “So it’s really unfortunate we are seeing this situation today.”

In separate statements, CPKC and CN say they've halted work after months of negotiations with the Teamsters union failed to yield agreements. Wages and scheduling are key stumbling blocks.

Labour Minister Steven MacKinnon, who stepped into his role about four weeks ago, stressed this week that the parties must “do the hard work necessary” to reach a deal themselves without relying on federal intervention. He met with CN and union representatives in Montreal on Tuesday and with CPKC and the Teamsters in Calgary on Wednesday, telling CTV News that issues between the parties involved "remained significant."