Honourable Filomena Tassi PC, MP
Minister of Labour
House of Commons
Ottawa, ON K1A 0A6
RE: CN Rail Service Disruption
Teamsters Canada Rail Conference (TCRC) has taken strike action against CN. As a consequence, CN has announced that the railway is winding down freight operations as of November 19th.
Rail service for western Canadian grain shipments is critical to meeting the demand from our export customers. The livelihoods of the entire value chain, including western Canadian farmers, depend on Canada’s ability to deliver product on time. Past service disruptions have caused significant damage to Canada’s reputation as a reliable grain supplier.
The impact of rail service disruptions is significant. In a normal commercial environment, customers whose suppliers are in a labour dispute have the option of moving their business to other providers. However, farmers and grain shippers do not have that option – they are captive to rail and most often captive to a single carrier.
Farmers will not be able to market their crops and will not receive their expected cash flow, cash flow that is needed to run their businesses. The inability to sell their crops will compound the marketing difficulties farmers are facing due to one of the most difficult harvest seasons in memory.
If the disruption continues, grain exporters will face significant demurrage costs and contract penalties as the lack of rail service will prevent them from meeting their contractual obligations in export markets.
The negative impact on the Canadian grains, oilseeds and specialty crops industry will have extended repercussions on jobs and the Canadian economy.
Rail service disruption will also impact the reputation of the Canadian brand in grain export markets. Reliability is a key component of the Canadian brand. Cereals Canada visits over 20 key markets every year, and in every one of those markets, questions about our logistics system and our ability to meet contractual obligations have been raised. We currently have teams in key markets in Asia and Latin America who are facing direct questions about Canada’s ability to service contracts.
The labour disruption at CN is effecting farmers in all parts of Canada. Farmers in Ontario and Quebec are fighting through one of the wettest harvests in recent memory. Because of the disruption in CN rail service, these producers are running out of the propane needed to dry their grain and complete harvest. Restoring the supply of propane Quebec and Ontario farm businesses, must be an urgent priority for the Government of Canada.
Cereals Canada and the Barley Council of Canada call upon you to lead the Government’s efforts to ensure that the strike at CN is ended. We request that the government immediately enact binding arbitration and begin the process of introducing back to work legislation. We call for parliament to resume prior to December 5th, 2019 to address this issue. We also ask that the government immediately make public the fact that it is prepared to take these actions to ensure the continuation of railway operations.
Long-term action also is needed to ensure that the threat of rail stoppages do not keep happening. Actual or threatened rail labour disruptions occur regularly, causing needless uncertainty in the entire value chain.
The movement of grain, oilseed and special crops by rail is of such importance to the Canadian economy that it cannot be repeatedly disrupted by labour disputes. The Canada Labour Code itself provides evidence that Parliament has recognized the importance of the industry. Section 87.7 of the Code prevents longshoremen from engaging in any strikes that would prevent the loading of grain onboard vessels. Grain, oilseed and special crop exports are treated as an essential service. This treatment should be expanded to include rail service. It is with this in mind that Cereals Canada and the Barley Council of Canada request that you introduce amendments to the Canada Labour Code that would deem the movement of grain by rail to be an essential service.
Canada’s reputation of providing a reliable supply of high-quality grains to international markets is at risk. Canadian farmers and exporters are depending upon your action.