Canada’s two major freight railroads could halt their trains Thursday if they cannot agree to renewed contracts with the union representing their engineers, conductors and dispatchers. Canada’s government is watching closely and may intervene to prevent widespread damage to the economy.

Both Canadian National and CPKC have been gradually shutting down since last week ahead of the contract deadline of 12:01 a.m. Eastern Thursday, and all traffic will stop before then if this is not resolved. Shipments of hazardous chemicals and perishable goods were the first to stop, so they would not be stranded somewhere on the tracks.

As the Canadian contract talks were coming down to the wire, one of the biggest U.S. railroads CSX, broke with the U.S. freight rail industry’s longstanding practice of negotiating jointly for years with the unions. CSX reached a deal with several of its 13 unions that cover 25 percent of its workers ahead of the start of national bargaining later this year.

The new five-year contracts will provide 17.5 percent raises, better benefits and vacation time if they are ratified. The unions that have signed deals with CSX include part of the SMART-TD union representing conductors in one region, the Transportation Communications Union, the Brotherhood of Railway Carmen and the Transport Workers Union. TCU President Artie Maratea said he is proud that his union reached a deal “without years of unnecessary delay and stall tactics.”

Canadian Prime Minister Justin Trudeau has been reluctant to force both sides into arbitration because he does not want to offend the Teamsters Canada Rail Conference and other unions, but he urged both sides to reach a deal Wednesday because of the tremendous economic damage that would follow a full shutdown.

“It is in the best interest of both sides to continue doing the hard work at the table,” Trudeau said to reporters in Gatineau, Quebec. “Millions of Canadians, workers, farmers, businesses, right across the country, are counting on both sides to do the work and get to a resolution.”

Trudeau said the labor minister met with both sides in the Canadian National talks in Montreal on Tuesday and would be on hand for the CPKC talks in Calgary, Alberta. The talks at both railroads were ongoing Wednesday.

The negotiations are stuck on issues related to the way rail workers are scheduled and concerns about rules designed to prevent fatigue and provide adequate rest to train crews. Both railroads had proposed shifting away from the existing system, which pays workers based on the miles in a trip, to an hourly system they said would make it easier to provide predictable time off.

The railroads said their contract offers have included raises consistent with recent deals in the industry. Engineers make about $150,000 a year on Canadian National while conductors earn $120,000, and CPKC says its wages are comparable.

Nearly 10,000 workers are covered by these contracts.

Countless businesses that rely on railroads to deliver their raw materials and finished products would be hurt if the trains do stop. All rail traffic in Canada and all cross-border traffic with the U.S. would stop, although CN and CPKC’s American and Mexican operations would continue.

Manufacturing companies may have to scale back or even shut down production if they cannot get rail service, while ports and grain elevators will quickly become clogged with shipments waiting to move. And if the dispute drags on for a couple weeks, water treatment plants all across Canada might have to scramble without new shipments of chlorine.

“If railways are not picking up the goods that are coming in by ships, then pretty soon your terminals get filled up. And at that point you cannot take any vessels at the terminal anymore,” said Victor Pang, Chief Financial Officer at the Vancouver Fraser Port Authority.

He pointed to the 13-day strike by 7,400 British Columbia dockworkers last summer, which manufacturers said blocked the flow of $368 million (U.S.) worth of goods each day.

Some companies would undoubtedly turn to trucking to keep some of their products moving, but there is no way to make up for the volume railroads deliver. It would take some 300 trucks to haul everything just one train can carry.

The Western Journal has reviewed this Associated Press story and may have altered it prior to publication to ensure that it meets our editorial standards.