The work stoppage of Canada’s two main railway companies is likely to lead to major supply chain issues as Canadian National Railway Co. and Canadian Pacific Kansas City Ltd. haul a combined total of $1 billion worth of goods daily.
While the effects may not immediately be felt by many Canadians, over 32,000 rail commuters are already being forced to find alternative means of travel for work in cities like Toronto, Montreal and Vancouver.
Commuters who use the TransLink’s West Coast Express in the Vancouver area, Metrolinx’s Milton line and Hamilton GO station in the Greater Toronto Area, and Exo’s Candiac, Saint-Jerome and Vaudreuil/Hudson lines in the Montreal area have all been affected by the strike as well as Via Rail’s northern Ontario line that runs through Sudbury.
However, commuters are just the tip of the iceberg, effects will be felt in grocery stores too and will worsen dramatically should the dispute drag on.
According to Food Health & Consumer Products of Canada, people in Atlantic and Western Canada will be the most impacted by the halt of perishable goods.
“A one-week rail disruption is expected to require six to eight weeks of recovery time before normal service levels are restored,” said the FHCP in a statement. “With rail carrying the equivalent of approximately 20,000 truckloads of consumer-packaged goods per month, the alternative—trucking—cannot adequately compensate for this volume.”
“After just 10 days of labor disruption, the estimated lost sales in Western and Atlantic Canada could reach approximately $40 million per week. This disruption will not only strain supply chains but also inflate costs and limit the availability of essential goods.”
The Canadian Federation of Independent Business said it has already been contacted by several businesses which have expressed fears about not being able to receive the crucial products they need to remain active.
“CFIB has already been hearing from businesses concerned about not getting essential shipments of aviation gas for forest fighting equipment, manufacturing inputs, vehicle parts, retail products, and agricultural equipment. Embargoes of certain refrigerated products or high-risk chemicals (e.g., chlorine, fuels, etc.) were in place even before the full lockouts,” Christina Santini, director of national affairs told True North.
Santini said that smaller businesses are poised to have a very difficult time when it comes to altering modes of transportation to keep things up and running.
“Alternative modes of transportation of goods can be inaccessible for many small businesses, as trucking capacity is already strained and shipments are now stuck in the system,” she said.
In addition to transportation issues, Santini said that many businesses had already been keeping less inventory in stock due to the current high cost of borrowing capital, meaning many products could soon become discontinued for the time being.
“We have heard that with the higher cost of borrowing and difficulty in accessing capital, many businesses have less inventory on hand,” said Santini. “These businesses may soon find themselves unable to offer certain products and services to consumers.”
Canada’s agricultural sector, especially in the Prairies, will also be seriously hurt without access to railways necessary for shipping and receiving products.
Agriculture industry advocacy group Fertilizer Canada warned that the strike will not only be felt hard at home but will take its toll globally as well.
“Farmers around the world rely on Canada’s fertilizer industry to maximize crop yields, and the fertilizer industry relies on rail to get our products to market,” said Karen Proud, head of Fertilizer Canada in a statement on Thursday.
The unprecedented strike began at 12:01 am Thursday morning after the two parties failed to reach an agreement with their employees’ union past the midnight deadline.
Union employee rest time, scheduling and wages were at issue during the negotiations.