Rail life seems to be getting back to normal this Monday, due to the intervention of the federal government and the decision of the Canada Industrial Relations Board (CIRB). Goods worth an estimated $1 billion a day will crisscross the country on rails. Some 9,300 railway workers have been ordered to return to work, a decision that their union, Teamsters Canada, is complying with, but which will be appealed to the Federal Court. Is the rail conflict dead and buried? Under the appearance of a return to calm, an unprecedented legal joust could well be brewing behind the scenes.
In this original case, one precedent would clash with another. This conflict could be called “The Power of the Economy versus the Strength of the Right to Strike.” The extraordinary intervention of federal Labour Minister Steven MacKinnon in the labour dispute between the Teamsters union and two Canadian railway companies, Canadian National Railway Company (CN) and Canadian Pacific Kansas City (CPKC), has shaken the entire world of labour relations. By making an exceptional use of section 107 of the Canada Labour Code — dealing with the Minister’s additional powers of intervention in a labour dispute — Mr. MacKinnon has opened the door to a challenge to the CIRB’s decision in court.
It could be said that he found himself in an impossible situation. An almost unprecedented situation, to say the least, and one that was effectively paralyzing the country’s economy by the hour. Doing nothing and letting the situation fester would have amounted to “economic self-sabotage,” declared a relieved Minister MacKinnon on Sunday evening. Inaction was leading straight to “economic carnage,” nothing less. While the Canadian population grew up with trains passing through and the regular crossing of railway lines across its territory, it may have only become aware last week of the critical nature of this mode of transportation. Last week, the rating agency Moody’s estimated that the two largest rail carriers, CN and CPKC, accounted for 75% of all commercial traffic.
Even a short-term shutdown of rail operations is unforgiving. In just one day, goods are sitting at point A while point B is demanding its due. The pulp and paper, wood, agriculture, automotive, metal products and quarrying industries are the hardest hit. No trucking contingency plan can save the day. This near-monopoly situation puts the country in an impossible situation.
It is precisely this balance of power — excessive, some will say — that the Minister of Labour has struck at the heart by resorting to section 107 of the Code and interfering in a labour dispute in a peremptory manner. The Teamsters union cannot be blamed for wanting to appeal the decision rendered by the CCRI on Saturday, because it is the right to strike, a constitutional right, that has been scratched in the process. In an excessive manner? It is not out of the question that the highest court in the country will have to calculate where the slip-up has been: on the side of a strike paralyzing the economy or on that of a group of workers deprived by force of their right to strike?
The Supreme Court of Canada has already ruled in this area, with a landmark decision in 2015 (Saskatchewan Federation of Labour v. Saskatchewan) establishing the constitutional protection of the right to strike. Starting from a conflict involving public sector employees and the intention of employers to limit their right to strike, particularly in a sector deemed an essential service, the court ruled that the Canadian Charter of Rights and Freedoms protected not only freedom of association, but also the right to strike, decreeing that the latter was inseparable from the right to a meaningful negotiation process. It should be noted that Ottawa rejects any desire to associate rail transportation with an essential service.
In its decision rendered last weekend, the CIRB was careful not to dabble in constitutional debates and avoided judging the validity of the Minister of Labour’s intervention. The decision also forced all parties to enter into binding arbitration. Existing collective agreements will continue to apply until employers and unions reach a negotiated agreement.
It will be interesting to see how the courts will analyze these competing precedents. On the economic side: billions of dollars per week at risk can scar the activities and numb the commercial affairs of an entire country in a few days, flaying our American neighbors in the process. On the labor law side: this is precisely where the balance of power of the union lies, which is entitled to wonder today whether this precedent applied by Minister MacKinnon could not open the way to other attempts to crush union rights, in the name of safeguarding the economy.