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Canada’s largest railroads have ground to a halt. Here’s what you need to know.
Canada’s two largest railroads have ground to a halt after an ongoing labor dispute couldn’t be resolved before the overnight deadline Thursday.
Canadian National and Canadian Pacific Kansas City (CPKC) have shut down all their trains in Canada and stopped shipments into the U.S. after failing to reach new agreements with the Teamsters Canada Rail Conference union. The impasse could bring significant economic harm to business and consumers in both countries, which rely on billions of dollars of goods running on trains each month.
The big questions are how long the shutdown will last and whether the government will intervene. Some Wall Street analysts said that previous rail halts suggest the impasse might be resolved in a matter of days.
“While a longer strike duration period is a possibility, we think history makes the probability of a shorter strike period much more likely (i.e., less than a week and more likely a few days of work stoppage once strike occurs),” Goldman Sachs analysts said in an August 20 report.
Here’s what to know.
What is the dispute about?
It boils down to a labor-contract dispute.
CPKC and CN locked out nearly 10,000 engineers, conductors and dispatchers after the deadline passed. As a result, none of their trains are moving in Canada, but both railroads continue operating in the United States and Mexico.
Bargaining resumed Thursday, with picketing already underway. Both railroads have said they would end the lockout if the union agrees to binding arbitration. But in a Thursday post to X, Teamsters Canada Rail Conference President Paul Boucher accused CPKC and CN of “holding the Canadian economy hostage” in order to pressure the government to impose binding arbitration.
What are the railroads offering?
Both railroads are offering raises to what are already well-paying jobs that they say are consistent with other recent deals in the industry. The negotiations are primarily hung up on issues related to worker schedules and concerns about rules designed to prevent train crew fatigue.
CN had been negotiating with the Teamsters for nine months while CPKC had been trying to reach an agreement for a year, the unions said. While the full stop came to head Thursday, both railroads began shutting down shipping networks last week.
What is the impact on businesses and consumers?
Billions of dollars of goods move between Canada and the U.S. via rail each month. The current impasse is halting all rail traffic from CPKC and CN in Canada as well as shipments from these two railroads crossing into the U.S., although trains will continue operating within in the U.S. and Mexico.
Chemical businesses and food distributors will be among the first to be affected. The railroads already stopped accepting new shipments of hazardous materials when they began gradually shutting down last week, in order to keep dangerous commodities from being stranded along the tracks. Perishable goods were also put on hold early.
But Greg Moffatt, executive vice president of the Chemistry Industry Association of Canada, said most chemical manufacturers have said they will be OK for about a week. It just depends on how many supplies they have on hand, how much room they have to store their products, and whether they can cut production.
The auto industry may see problems, too. If the lockouts last more than two weeks, people who want to buy a new vehicle in the U.S. and Canada could start to see spot shortages, industry analysts say.
That’s because General Motors, Stellantis, Ford, Honda and Toyota either assemble whole vehicles in Canada or ship engines and other components across the border. About 80% of vehicles put together in Canada are shipped to the U.S., largely by rail. Michael Robinet, executive director at S&P Global Mobility, notes that most auto assembly plants operate on “just-in-time” inventories of parts — making it difficult to stockpile farther out.
Automakers could try to divert vehicles built overseas to U.S. ports, or ship parts over the border by truck, but capacity is limited, Robinet added.
Is there an impact on the U.S.?
Yes, although the rail hike will likely only disrupt a small part of U.S. trade, according to Goldman Sachs analysts, which estimated the disruption at 1% to 2% of total U.S. shipping.
Some shipments between the U.S. and Canada are likely to be rerouted onto trucks, while other companies may bypass the situation by diverting shipments into U.S. ports, they added.
Does it impact more than cargo?
Yes, as more than 30,000 commuters in Vancouver, Toronto and Montreal were the first to feel the pain of the lockouts. They had to scramble Thursday morning to find ways to get to work because their commuter trains aren’t operating while CPKC is shut down.
What is the Canadian government doing?
Prime Minister Justin Trudeau declined to immediately force the parties into binding arbitration, out of fear of offending the Teamsters Canada Rail Conference and other unions.
But that could change.
“We are not taking this lightly because Canadians across the country are worried about it,” Trudeau told reporters in Sherbrooke, Quebec, Thursday. He added that “we will have more to say” shortly on finding a solution.
Still, the lack of early government intervention angered business leaders.
“When you completely shut down the coast-to-coast supply chain, nothing good can come from that,” said John Corey, president of the Freight Management Association of Canada. “This is infuriating. People are going to lose their jobs.”
How long will the rail halt last?
It’s hard to predict. Most previous Canadian rail stoppages have only lasted a day or two and usually involved only one of the big railroads, but some have stretched as long as eight or nine days.
Edward Jones analyst Jeff Windau said the biggest problems will emerge if the lockout drags on. But many companies will likely be able to withstand a short disruption, partly because of changes they made to their supply chains after the pandemic, he said.
Still, pressure for government intervention will increase as the lockout continues, with the impact magnified because both railroads are stopped.
For now, all eyes are on the ongoing contract talks and whether there will be any significant government intervention.
“It won’t take much time for it to become untenable,” said Daniel Béland, a political science professor at McGill University, noting potential economic consequences for both Canada and the U.S. “Pressures to end it ASAP come from both sides of the border and they can only increase rapidly over time if and when the situation on the ground deteriorates.”
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Moscow — Former Royal Ballet star Sergei Polunin, famous for his tattoos of Russian President Vladimir Putin, on Wednesday announced that he plans to leave Russia. The Ukrainian-Russian dancer was one of the most prominent stars who backed Russia’s unilateral 2014 annexation of Crimea and its military assault on Ukraine. He was rewarded with prestigious state posts.
In a rambling, misspelled message on his Instagram account, Polunin wrote: “My time in Russia ran out a long time ago, it seems at this moment that I have fulfilled my mission here.”
The post first appeared Sunday on his little-read Telegram account.
Ian Gavan/Getty
Polunin, 35, did not give a specific reason for leaving but said that “a time comes when the soul feels it is not where it should be.”
He said he was leaving with his family — his wife Yelena and three children — but “where we will go is not clear so far.”
In the summer, the dancer complained of a lack of security and said he was being followed.
Polunin, who was born in Ukraine, backed Putin’s 2014 annexation of Crimea — a prelude to the ongoing, full-scale invasion of Ukraine that Putin launched in February 2022.
The dancer was granted Russian citizenship in 2019. He was appointed acting head of a dance academy in occupied Crimea’s biggest city, Sevastopol, and director of the city’s opera and ballet theatre, for which a large new building is under construction.
Just last year he was decorated by Putin for his role in popularizing dance. But in August he was replaced as head of the dance academy by former Bolshoi prima Maria Alexandrova, and a week ago, Russia’s arts minister Olga Lyubimova announced his theater director job would go to singer Ildar Abdrazakov.
This came after on December 9 Polunin published a social media post saying he was “very sorry for people” living in the heavily bombarded village near Ukraine’s city of Kherson, where his family originates from, and that “the worst deal would be better than war.”
Ian Gavan/Getty
Aged 13, Polunin won a scholarship to train at the Royal Ballet School in London and became its youngest ever principal dancer.
With his tattoos — including a large depiction of Putin’s face emblazoned prominently on his chest — and his rebellious attitude, he became known as the “bad boy of ballet” and caused a sensation by resigning from the Royal Ballet at the height of his fame in 2012.
Later he made a 2015 hit video to Irish musician Hozier’s song “Take Me to Church” and was the star of a 2016 documentary called “Dancer.”
He moved to perform at Moscow’s Stanislavsky Musical Theatre’s ballet before launching a solo career, starring in dance performances in roles including the mystic Grigory Rasputin.
In 2019 he posed for AFP with a large tattoo of Putin on his chest which he later supplemented with two Putin faces on either shoulder. He also has a large Ukrainian trident on his right hand.
This year he took part in Putin’s campaign for reelection as a celebrity backer.
Washington — The Supreme Court on Wednesday agreed to consider South Carolina health department’s effort to cut off funding from Planned Parenthood because it performs abortions, wading into another dispute over access to the procedure in the wake of its reversal of Roe v. Wade.
The case, known as Kerr v. Edwards, stems from the state’s decision in 2018 to end Planned Parenthood South Atlantic’s participation in its Medicaid program. Gov. Henry McMaster, a Republican, directed the South Carolina Department of Health and Human Services to deem abortion clinics unqualified to provide family planning services and end their Medicaid agreements.
Planned Parenthood operates two facilities in the state, one in Charleston and the other in Columbia, and provides hundreds of Medicaid patients with services like physicals, cancer and other health screenings, pregnancy testing and contraception. Federal law prohibits Medicaid from paying for abortions except in cases of rape or incest, or to save the life of the mother.
Planned Parenthood and one of its patients, Julie Edwards, sued the state, arguing that cutting off its funding violated a provision of the Medicaid Act that gives beneficiaries the right to choose their provider.
A federal district court blocked South Carolina from ending Planned Parenthood’s participation in its Medicaid program, and a U.S. appeals court upheld that decision, finding that Edwards could sue the state to enforce the Medicaid Act’s free-choice-of-provider requirement.
The legal battle has already been before the Supreme Court in the past, with the high court last year ordering additional proceedings after deciding in a separate case that nursing home residents could sue their state-owned health care facility over alleged violations of civil rights.
After reconsidering its earlier decision, the three-judge appeals court panel ruled unanimously in March that Edwards’ lawsuit against the state could go forward and said South Carolina couldn’t strip Planned Parenthood of state Medicaid funds.
“This case is, and always has been, about whether Congress conferred an individually enforceable right for Medicaid beneficiaries to freely choose their healthcare provider. Preserving access to Planned Parenthood and other providers means preserving an affordable choice and quality care for an untold number of mothers and infants in South Carolina,” Judge Harvie Wilkinson wrote for the 4th Circuit panel.
South Carolina officials asked the Supreme Court to review that decision, marking the third time the case has been before the justices. The justices agreed to take up the question of whether “the Medicaid Act’s any-qualified provider provision unambiguously confers a private right upon a Medicaid beneficiary to choose a specific provider.”
South Carolina is among the more than two dozen that have passed laws restricting access to abortion in the wake of the Supreme Court’s June 2022 decision reversing Roe v. Wade. In South Carolina, abortion is outlawed after six weeks of pregnancy with some exceptions.
Several states have also enacted laws blocking Planned Parenthood from receiving Medicaid funding, including Arkansas, Missouri, Mississippi and Texas.
