Specter of a labor conflict in rail transport | Battle stations for Quebec SMEs

Faced with a rail transport shutdown that could occur as early as next week, some sectors are working to find alternative routes so as not to be too affected. A tough task.

“Manufacturers are extremely concerned,” admits Véronique Proulx, CEO of the Quebec Manufacturers and Exporters group, who understands the full extent of this potential labour dispute.

The country’s two major railway companies are facing possible strikes or lockouts that could begin as early as next week – CPKC (Canadian Pacific Kansas City) and CN (Canadian National Railway Company).

According to her, consumers would feel it very quickly, because inevitably, the situation would lead to additional costs for manufacturers and retailers, to delays, or even shortages depending on the duration of the conflict.

For local businesses, the situation is critical. Véronique Proulx lists some of the labour disputes that have affected transportation in the country in recent years, including the two strikes at the Port of Montreal.

This can end up leading to a loss of credibility: “When you are an American company and you have operations in Quebec or Canada,” she says, “at some point, you wonder what is happening in Canada.”

In addition to the additional costs, the labour dispute risks, if there were one, creating delivery delays for local industries. This would lead to financial penalties for the sectors in default. “It would harm the competitiveness of Quebec and Canada in terms of investment,” maintains Véronique Proulx.

She is not the only one of this opinion.

“There will be repercussions for many SMEs,” confirms Jasmin Guénette, vice-president of national affairs at the Canadian Federation of Independent Business, who also recalls other recent labour disputes in the transportation sector..

Already, both railway companies have begun to interrupt some deliveries of dangerous materials in order to avoid them being caught en route, if there were a stoppage.

Jasmin Guénette points out that it is not only large companies that will be penalized by a paralysis on the rails, but also SMEs. He gives the example of a contractor who does not receive his renovation materials or retail businesses that will run out of merchandise at the start of the school year.

Sensitive sectors

Some sectors are particularly sensitive. “If there are perishable products and a shutdown lasts a long time, there is also the issue of inventory loss,” says Jasmin Guénette.

At the Quebec Association of Animal and Cereal Nutrition Industries (AQINAC), there is a real commotion.

Agricultural entrepreneurs have been working for weeks to stockpile food so they can continue to feed their animals. “We work with living things,” says Sébastien Lacroix, general director of AQINAC. And the grains used for animal feed are transported by rail from one end of the country to the other.

Among the consequences of a conflict, some breeders would have to change the feed of their animals, which is never good when it is not planned. Obviously, this could lead to shortages. “But now, we are in the phase of apprehension of the blockage,” tempers Sébastien Lacroix.

“Limited Plan B”

In other disaster scenarios, the situation where breeders would be caught with their animals. A sector like pork, for example, largely exports its meat.

” “Plan Bs are very limited,” says Sébastien Lacroix. “About three trucks fit in a wagon,” he compares. And you still have to find trucks that are suitable for the goods to be transported, at a time when everyone is looking for them.

Alternative transportation will drive up costs, adds Simon Baillargeon, vice-president of business development at Sollio Groupe Coopératif. “The cost of feed will increase,” he says, for animals.

And for consumers?

According to Simon Baillargeon, the producer risks assuming part of these additional costs, in a context where food price increases are difficult for consumers to swallow.

Sollio members hope that if there is a conflict, it won’t last too long for another reason: fall is coming and it’s harvest season. In addition to transporting food, producers need propane for their grain dryers.

For political intervention

Federal Labour Minister Steven MacKinnon on Thursday rejected a request from CN for binding arbitration.

“We are telling Minister MacKinnon that he must act,” says Véronique Proulx. “He has the capacity to act. He can ask the Canada Industrial Relations Board [CCRI] to appoint an arbitrator. With binding arbitration, the arbitrator’s decision is binding on both parties. There is no favoritism.”

Sylvie Cloutier, president of the Conseil de la transformation alimentaire du Québec, emphasizes that the CCRI’s decision found that a work stoppage in the sector would not pose any “serious danger” to public health or safety.

“I have a lot of difficulty digesting the fact that people say that rail is not essential. We are also affected by propane, for example,” she said. “A lot of companies use propane and natural gas. […] For us, rail is essential.”