Canada tells rail companies and unions to work harder to avoid crippling shutdown By Reuters

By David Ljunggren and Promit Mukherjee

OTTAWA (Reuters) – The Canadian government, seeking to avert a crippling transportation shutdown, told the country’s two main rail companies and the Teamsters union on Monday to work harder to reach labor agreements.

If no deals are reached, both Canadian National Railway (TSX:) and Canadian Pacific (NYSE: ) Kansas City will close at the same time early Thursday for the first time in history.

Canada – the world’s second-largest country by land area – relies heavily on rail to transport grain, fertilizer and goods, and the country’s main business lobby group estimates losses could reach $1 billion (733 of millions of dollars) per day during a shutdown.

Federal mediators are working with the companies and the union, but those involved in the discussion say little progress has been made. The union says CN Rail and CPKC want to water down safety provisions, a charge the companies deny.

In a post on the X social network, federal Labor Minister Steve MacKinnon said the effects of the talks will be borne by all Canadians.

“The parties must do the hard work necessary to reach agreements at the bargaining table and prevent a complete work stoppage,” he said.

MacKinnon has the power to force unions and rail companies to adopt binding arbitration, but so far has said he wants them to settle their differences at the bargaining table.

Labor talks began earlier this year, but progress has been slow, with both the union and the companies accusing each other of bad faith.

CN Rail and CPKC have already stopped accepting shipments of dangerous goods and are ceasing operations.

Maersk said Monday it would stop accepting some shipments to Canada.

Canada is a big agricultural producer and farmers will start bringing in their crops in August and September.

Quorum Corporation, which monitors grain handling and transportation, said in early September daily volumes would rise to 138,000 tonnes, worth about $75 million.

“Over a period of time, sales will be lost and the value of Canadian grain will decrease…the biggest concern is a further degradation of Canada’s reliability as a supplier, which is already suffering from previous work disruptions,” Quorum President Mark , Hemmes said in an emailed statement.

Concerns are growing that container shipments in and out of Pacific Northwest and Canadian Pacific ports will be halted as dock workers’ unions have indicated they will not handle cargo scheduled for Canadian rail.

Refrigerated containers of meat and some highly perishable products are of particular concern, as delays would likely mean spoilage.

Shippers of these goods have begun to hold back containers, said Peter Friedmann, executive director of the Agricultural Shipping Coalition.

($1 = 1.3641 Canadian dollars)