Visiting Canadian leaders doing U.S. damage control as rail dispute hits supply chain

Workers picket the Canadian Pacific Railway headquarters in Calgary, Alta., March 20, 2022. THE CANADIAN PRESS/Jeff McIntosh

Canadian business leaders who happened to be in the U.S. capital Monday said they were in damage control mode as a work stoppage at CP Rail deals another blow to cross-border supply chains.

Goldy Hyder, president and CEO of the Business Council of Canada, said U.S. lawmakers and counterparts -- even White House officials -- have been worried for weeks about a possible labour dispute.

"I expect to hear a lot about it," Hyder said, 10 days removed from an earlier visit when the subject was already coming up in his meetings on Capitol Hill.

"There's a genuine risk here of Canada being seen as unreliable at a time when reliability is most valued and needed."

The damage to Canada's reputation could be lasting, coming as it does on the heels of last month's week-long shutdown of the Ambassador Bridge between Detroit and Windsor, Ont., he added.

The Canadian Vehicle Manufacturers' Association warned Labour Minister Seamus O'Regan on Monday that a protracted dispute would have a "devastating" effect on critical supply chains already weakened by the COVID-19 pandemic.

In a letter to O'Regan, president and CEO Brian Kingston said rail is a critical component in automotive supply chains, and a driver shortage in the trucking industry means there are few viable alternatives.

"Rail service disruptions at this time would be devastating to the Canadian economy," Kingston wrote.

"The Ambassador Bridge blockade amplified the narrative that the United States cannot depend on Canada as a reliable supply chain partner. Given protectionist sentiments among many American policy-makers ... this narrative cannot be reinforced by a protracted rail strike."

Flavio Volpe, president of the Auto Parts Manufacturers' Association, another prominent member of Canada's auto sector, said he's already getting an earful from U.S. officials.

"The CP Rail strike has come up twice in Washington (since) I landed just over an hour ago," Volpe tweeted. "We need to resolve this ASAP. Tough timing."

The CP Rail dispute is likely to be a familiar topic for Ontario Premier Doug Ford, who also happened to be in D.C. to promote his province as a reliable supplier and manufacturing partner to the U.S.

O'Regan is under mounting pressure to legislate some 3,000 CP Rail conductors, engineers and train and yard workers back to work.

The railway and the Teamsters Canada Rail Conference union blamed each other for causing the work stoppage, though the two sides spent Sunday talking with federal mediators.

The House of Commons resumed sitting Monday following a two-week break, so legislation could come immediately if the government so chooses.

But a spokeswoman for O'Regan said on the weekend that the government believes the best deal is reached at the bargaining table. And on Monday, O'Regan expressed a similar sentiment.

"Second day of a work stoppage but CP and Teamsters Rail remain at the table," he said in a statement from Calgary, where talks were taking place.

"We have faith in their ability to reach an agreement. Canadians expect them to do that ASAP."

This report by The Canadian Press was first published March 21, 2022.