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CN, Teamsters reach tentative deal, with economic fallout still top of mind

MONTREAL — Canada’s largest railway and Teamsters Canada have reached a tentative deal to renew a collective agreement for more than 3,000 workers, ending a strike that triggered layoffs, disrupted industries and halted bulk and container shipments.

Normal operations at Canadian National Railway Co. will resume Wednesday at 6 a.m. local time across Canada, the union said.

The federal government had faced mounting pressure to resolve the strike — either through swift mediation, binding arbitration or back-to-work legislation — as premiers and industry voiced concerns about lost profits and a critical propane shortage in Quebec.

However the government said it believed that the quickest way to end the dispute would be a negotiated settlement hammered out at the bargaining table.

The union thanked the prime minister for respecting the workers’ right to strike and acknowledged the help of Labour Minister Filomena Tassi, Transport Minister Marc Garneau and the federal mediation and conciliation service in reaching the deal.

“Previous governments routinely violated workers’ right to strike when it came to the rail industry. This government remained calm and focused on helping parties reach an agreement, and it worked,” Teamsters Canada president Francois Laporte said.

CN chief executive JJ Ruest thanked the railway’s customers for their patience and support and said it was preparing to resume full rail operations as soon as possible.

“I would also like to personally thank our employees who kept the railroad moving safely at a reduced capacity,” Ruest said in a statement.

Details of the settlement agreement, which must be ratified by union members, were not immediately available. Ratification is expected within eight weeks.

About 3,200 CN conductors, trainpersons and yard workers across the country, who have been without a contract since July 23, have been off the job since early last Tuesday morning over worries about long hours, fatigue and what they consider dangerous working conditions.

Time-off provisions, drug insurance benefits and a lifetime cap on drug insurance benefits emerged as sticking points as bargaining continued around the clock under the watch of federal mediators at a Montreal hotel.

Tassi and Garneau congratulated the two sides for staying at the bargaining table and reaching an agreement.

“These agreements are further evidence that when employers and organized labour work together, we get the best results for Canadians and for our economy,” the ministers said in a statement.

The deal came a day after Nutrien Ltd. announced that it would temporarily shut down its largest potash mine, laying off 550 employees in southeastern Saskatchewan for two weeks starting Dec. 2 due to the strike. The fertilizer giant said Tuesday the layoffs will go ahead despite the deal.

“In terms of the backlog that was created with the supply chain due to the strike over the past week, it’ll take some time to recover,” Nutrien spokesman Jeff Holzman said.

The strike, had it continued through the end of the week, could have cost the Canadian economy between $1.6 billion and $2.2 billion, according to TD senior economist Brian DePratto.

The Mining Association of Canada, which echoed Alberta ministers in calling last week for an early return of Parliament to pass back-to-work legislation, said the strike was deeply felt by the sector.

“These impacts will continue to be felt for the foreseeable future as it takes approximately a week to move the backlog created per day of disrupted service,” the association said in a release.

The Agricultural Producers Association of Saskatchewan called on the transport minister to ask CN for an immediate update on its winter shipping plans.

“We need to know how CN plans to make up the shipping shortfall,” association president Todd Lewis said in a statement. “This is crunch time for our cash flow and producers need to move grain to get paid.”

CN confirmed job cuts earlier this month just before the strike began due to sputtering commodities shipments and trade tensions between the U.S. and China.

The railway cut its profit outlook for 2019 in October, saying a weaker economy had eroded rail demand. The Montreal-based company lowered its expectations for adjusted earnings per share to the high single digits, down from predictions of low double-digit growth.

This report by The Canadian Press was first published Nov. 26, 2019.

Companies in this story: (TSX:CNR, TSX:NTR, TSX:CP)

Christopher Reynolds, The Canadian Press