Canadian National Railway Strike Could Result in $3.1 Billion Hit to National Economy

The strike started by the Canadian National Rail this week is expected to take a multibillion dollar hit on the Canadian economy if a solution is not found before the parliament sits again next month. Starting on Tuesday, yard operators and conductors at the Canadian National Railway Co. walked away from their posts, immediately impacting shipments of multiple essential exports.

Lawmakers are expected to resume work on the 5th of December in Ottawa, following the October election. If the disruption continues until then, the strike could cut output by around CAD 3.1 billion, which will account for a loss of approximately a quarter percentage point for the 4th quarter.

Brian DePratto, an economist for the Toronto-Dominican Bank spoke about the matter: β€œThe longer this goes on, the bigger the knock-on effects are likely to be, particularly for sectors like agriculture and chemicals. So the Dec. 5 impact analysis may be somewhat conservative.”

Government Seeks a Negotiated Settlement

Global trade tensions have already started to put a brake on economic growth, with a 1.3 per cent estimate for the gross domestic product in the 4th quarter. Canadian National is the largest railway operator in the country, and is largely responsible for transporting shipments of consumer goods, oil, and grain from the inland prairie regions to the United States and other ports, which is exported around the world.

Prime Minister Justin Trudeau has been facing numerous calls to legislate to end the strike. On the other hand the transport minister has indicated that the government would prefer to go through a negotiated settlement. Filomena Tassi, the Labor Minister, who was named to the portfolio mere hours before has promised to reach out to both sides in the next couple of days.

So far the government is resisting calls to act on the railway strike, despite the fact that Quebec is now on the verge of a propane shortage. CEOs and premiers continue to pile on the pressure to reconvene the parliament ahead of schedule and settle to push the 3200 workers bank to their jobs.

Leave a Reply

Your email address will not be published. Required fields are marked *