Teamsters point finger at CN Rail over propane shortage from strike

The union representing striking Canadian National Railway workers said early Friday there was "no substantive progress" in talks aimed at ending the dispute, and they hit back at what they characterized as a "fabricated" narrative of a propane shortage that has emerged through politician statements and media reports.

As the strike entered its fourth day, the Teamsters Canada Rail Conference (TCRC) said there are still hundreds of employees on the job operating trains, and that what those trains carry is a decision made by CN.

Lyndon Isaak, TCRC president, speculated that the company may be throttling the supply of propane.

"CN is far from operating at full capacity, but we believe there are enough trains going around to allow the company to supply propane to Ontario and Quebec," said Isaak. "The question is whether CN refuses to transport propane to create a crisis and force a special back-to-work law."

CN said in a statement it was doing the best it can given the limited resources in a strike scenario.

"CN has a small pool of qualified managers that only allows the company to operate at approximately 10 per cent of normal service across its extensive 22,000-kilometre-long Canadian network safely," the corporation said. "Currently, very limited amounts of various commodities are moving across the country. This includes container traffic to keep Canada's ports fluid to be able to return to normal operations after the strike."

Across the country, politicians and industry leaders have raised the prospect of critical shortages resulting from a prolonged strike that would impact a number of economic sectors.

The governments of Alberta and Saskatchewan have called on Ottawa to intervene. Quebec, which sees 85 per cent of its propane supply transported by rail, has also done so.

At least for the time being, the federal government is not considering such action.

Transport Minister Marc Garneau said Friday that a train has left Edmonton with 100 propane cars, but will take some time to get to Quebec, and that he was told there are some trucks with propane that could also come from Sarnia, Ont.

"We want to resolve this as quickly as possible," Garneau said, reiterating his statement from the previous day that the collective bargaining process is the best way forward.

Ontario Premier Doug Ford appeared to agree with Garneau's view on Friday after meeting with Prime Minister Justin Trudeau.

"Calling back the legislature is one thing. But it doesn't happen right way," said Ford.

Ford, however, agreed it was a "critical time right now" with respect to propane supply, citing shortages in the northern and rural areas of his province.

Quebec rationing to get through to next week

Jonatan Julien, Quebec's national resources minister, gave an update on the province's status on Friday.

He said the province has a current supply of six million litres of propane, with another 14 million from various sources expected soon. By rationing supply, Julien said Quebec can "get to the end of next week."

"We are looking at all solutions, but if it continues, things will get more complicated to provide propane in Quebec," he said.

Negotiations between CN Rail and the union are continuing with the help of a federal mediator, but the Teamsters have rejected CN's call to enter a process of binding arbitration.

Industry groups representing petroleum producers, and the chemistry, mining and propane industries, are among those expressing concern about the impact of a strike, especially if it drags on. It is estimated that 60 per cent of crude-by-rail exports in Canada are transported by the Montreal-based company.

Hours-long delays have been reported by truckers in Sarnia, Ont., the end point of propane shipped from Western Canada by pipeline, where it is then transported by truck or rail.

The Canadian Propane Association has urged the federal government to take "whatever action is necessary" to ensure transportation of propane is not interrupted.

Nathalie Saint-Pierre, president and executive director of the association, noted that in a 2007 strike, CN Rail had a contingency plan with reduced delivery to ensure propane was available in Quebec.

Propane distributors are adjusting as a result of the strike. Ian Wilson, the president of Wilsons Heating in Nova Scotia, said his company is exploring bringing propane in by truck, a more expensive proposition.

Wilson said his company is prioritizing customers who use propane for heating, and in some cases are making smaller deliveries to customers than would normally be the case.

Economic impact could soon reach $1B

The Grain Farmers of Ontario is among the groups concerned about the impact on the agricultural industry in what has described as a challenging growing season.

Farmers need propane for grain dryers, among other uses, and a prolonged strike's impacts "might be downloaded to the consumer at a certain point," according to Grain Farmers chair Markus Haerle.

"Is it going to be right away? I doubt it will be. But there will be a financial impact to the consumer," said Haerle.

Quebec farmer Dominique Leroux described the feeling as "desperation," as a late growing season has meant hectares of crops have yet to be harvested and dried.

Avery Shenfeld, managing director and chief economist of CIBC Capital Markets, said Friday they were monitoring developments and if necessary would adjust its fourth-quarter forecast for the Canadian economy, in which projections for growth were already expected to be modest.

"Should this strike drag on, it would clearly be disruptive to the Canadian economy and to the company in question, both due to the direct reduction in the transportation services component of GDP, the resulting backup in unshipped inventories, and the further spillover from that into production in affected sectors," Shenfeld said via email.

A five-day strike could cost the Canadian economy between $800 million and $1.1 billion in the fourth quarter, TD Bank's senior economist, Brian DePratto, told Reuters.

About 3,200 conductors, train personnel and yard workers are on strike.

The workers, who have been without a contract since July 23, say they're concerned about long hours, fatigue and what they consider dangerous working conditions. Wages are not among the critical areas of dispute.

The union has said passenger rail services in the country's three biggest cities would not be affected by the strike.

The strike went into effect days after CN confirmed it would be cutting jobs in response to a weakening North American economy depressing demand for railroaded transportation, though it did not specify how many workers would be affected.