Why Canada's rail dispute matters in a province without trains

With Canada's two biggest freight railroad companies set to enter binding arbitration with the labour unions representing their workers, there are still concerns about what a prolonged disruption could mean for Prince Edward Island.

The province hasn't had a rail system for decades, but trucks usually pick up supplies from train yards on the mainland and bring them the rest of the way — or vice-versa in the case of things P.E.I. is exporting.

"Our big concern about the Port of Halifax is that container ships that come to Halifax are also going to many other places up and down the seaboard," said Russ Mallard, president of Atlantic Beef Products, a beef processor in central P.E.I.

"Let's pretend they are coming to Halifax first to pick up or drop off. They're not going to wait around. They're going to drop their containers off. The container port will likely fill up very quickly."

Freight traffic on the two largest rail networks came to a halt simultaneously early Thursday morning after months of increasingly tense and bitter labour negotiations.

Canadian National Railway Co. (CN) and Canadian Pacific Kansas City Ltd. (CPKC) locked out 9,300 engineers, conductors and yard workers after the parties failed to agree on a new contract before the midnight deadline.

Atlantic Beef Products likely won't face an immediate impact, said Mallard, because most of its product is shipped across Canada by truck. But there could be knock-on effects.

Grain is often dried in propane heaters on the road to becoming feed for cattle. And the bulk of propane distribution is done by rail, Mallard said.

While scans of the market so far show propane inventories are good in the Atlantic region, "if this went on for any length of time, I think that would also be a real impact," he said.

Neil Campbell, manager of the P.E.I. Grain Elevator Corporation, will be keeping a close eye on the propane supply.

"We dry our grain here with propane, and as the harvest drags on, it will probably be wetter and wetter," said Campbell. "We do use a lot of propane."

Grain can't be shipped wet and it won't keep in storage very long before it starts to spoil, he said. "It certainly would be frustrating."

The grain already in storage at Campbell's facility is dry, so he's not worried about it. The concern is with the new product coming in.

Senator Mary Robinson is the former vice-president of the World Farmers' Organisation, an umbrella group for national farmers' organizations and agricultural co-operatives from all over the planet. She too is monitoring the stoppage.