Railway shutdown has already had an impact on Ontario's forestry sector
CBC
A shutdown of Canada's two largest railways has already created a "logistical nightmare" for Ontario's forestry sector, according to the president of the Ontario Forest Industries Association.
"Product is not moving to customers and all of this is going to cost our industry millions," said Ian Dunn.
Dunn says Ontario's three pulp and paper mills need chemicals that can only be shipped by rail for safety reasons. And lumber companies ship between 70 and 80 per cent of their products by rail.
While some products can be transported by truck, he says it's not a solution that fully replaces the rail system.
"We're already facing a trucking shortage, even with rail," he said.
The disruption also comes a week after the U.S. nearly doubled its softwood lumber duty on imports from Canada. It went up from 8.05 per cent to 14.54 per cent.
Canadian National Railway Co. (CN) and Canadian Pacific Kansas City Ltd. (CPKC) locked out 9,300 engineers, conductors and yard workers on Thursday after the parties failed to agree on a new contract.
The workers are represented by the Teamsters union, which has asked for better wages, benefits and working hours, arguing that many employees are on call 24/7.
Thursday afternoon, the federal government stepped in, as Labour Minister Steve MacKinnon announced he has sent the dispute into binding arbitration. Once the process begins, he believes workers would return to their jobs in no more than a couple of days.
However, Charla Robinson, president of the Thunder Bay Chamber of Commerce, says it can take several weeks for businesses to recover from even a short rail shutdown.
"You don't stop and start a rail system for a country on a dime," she said.
Peter Xavier, the vice-president of mining company Glencore's Sudbury Operations says the rail network is critical to his company's smelter in the northern Ontario city.
"We have some ability to truck material in and out, but with the volumes and distances, it's really not practical to do to get that full capacity," he said.
"As soon as there's disruption in the rail network, we're immediately curtailing some aspect of our operations."
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