A week-long rail strike that halted shipments of oil, grains and potash across Canada, threatening to take a multibillion-dollar bite out of the economy, is over.
The Teamsters Canada Rail Conference union said it reached a tentative deal with Canadian National Railway Co. and normal operations will resume at 6 a.m. on Wednesday. About 3,200 conductors and railyard workers walked off the job Nov. 19 over issues such as working conditions and drug benefits.
CN Rail shares rose 0.9% to C$121.97 in Toronto after losing 1.4% during the strike.
The deal must now be ratified by Teamsters members via secret-ballot electronic voting, which CN Rail said in a statement it expected to take eight weeks. The union thanked Prime Minister Justin Trudeau for respecting workers’ right to strike.
“Previous governments routinely violated workers’ right to strike when it came to the rail industry,” Teamsters Canada President François Laporte, said in a statement Tuesday. “This government remained calm and focused on helping parties reach an agreement, and it worked.”
The walkout was the first in a decade at Canada’s largest railway, one of the two main companies that haul cargo across the country, and had begun to take an increasing toll on the economy. Industry groups had been pleading with Trudeau to legislate an end to the strike but the government had pushed for a negotiated settlement.
Montreal-based CN Rail carries about C$250 billion ($189 billion) worth of goods annually, including 180,000 barrels a day of oil in September, according to its earnings call.
“CN is preparing to resume full rail operations as soon as possible,” said Jean-Jacques Ruest, chief executive officer of CN Rail, said in the statement. “I would also like to personally thank our employees who kept the railroad moving safely.”
Amid the ripple effects, Nutrien Ltd., the world’s biggest fertilizer producer, had planned to temporarily close ts biggest potash mine starting Dec. 2, laying off 550 of 600 employees. Ships were waiting for grain off the West coast and the Montreal Port Authority reported cargoes of grain, sugar, minerals and bulk liquids were stalled on CN convoys. Farmers in Quebec and Ontario faced the prospect of letting their crops rot in the fields as the strike stalled shipments of propane used for drying.
The nation’s gross domestic product was estimated to have lost as much as C$2.2 billion ($1.65 billion) if the deadlock lasted until Nov. 30, economists at Toronto-Dominion Bank predicted. If extended until Dec. 5, when lawmakers resume work in Ottawa, the conflict would have burnt a C$3.1 billion hole in the economy, the strategists forecast. That’s equivalent to a nearly one-quarter percentage point loss in the fourth quarter.
Canada is the biggest exporter of canola, lentils, potash, field peas, flax and oats, according to government agencies, and much of it is hauled by rail from its vast inland Prairies to the coast.
Canada has already been caught in the middle of China-U.S. trade tensions. China has shunned imports of canola following a diplomatic row over the arrest of a Huawei Technologies Co. executive on an extradition request from the U.S.
© 2019 Bloomberg L.P.