As harvest season begins, farmers across Manitoba are bracing for a potential rail stoppage that would have a cascading effect on the production, storage and transportation of grain across Canada.
The country’s two major railway lines — the Canadian National Railway (CN) and the Canadian Pacific Kansas City (CPKC) — are on the verge of locking out thousands of workers beginning Thursday, while the union says it is ready to call a strike for that day.
On Wednesday, Prime Minister Justin Trudeau and Finance Minister Chrystia Freeland each urged the two sides, embroiled in tense labour negotiations, to reach a deal because they argued a massive rail shutdown would sabotage the country’s economy.
Western Canadian Wheat Growers Association president Gunter Jochum, who farms more than 2,400 hectares with his brother-in-law just west of Winnipeg, said he’s feeling anxious and stressed about the economic impact a rail stoppage would cause.
“This will shut down not just agriculture, but the whole economy — everybody will feel it,” Jochum said, as he took a break Wednesday from harvesting his wheat crop.
Farmers in the Prairies rely heavily on being able to haul their products to grain elevators, so they can get paid, but if elevators reach full capacity because there’s no trains to move the goods, farmers will likely store their products on the ground and suffer financially, Jochum said.
“We have huge bills from growing this crop that we need to pay here in the fall,” he said, adding farmers can spend between $300 to $400 to grow an acre. “It’s a catastrophe unfolding.”
Jochum said he’s spoken with people at two elevators near his fields who say their elevators could fill up within a week once more farmers begin harvesting.
While farmers will suffer, the elevators will be penalized themselves for not delivering the products on time to their customers overseas, he said.
Peter Flengeris, communications manager for Viterra Canada, said a rail stoppage would have an “immediate and severe impact” on the agriculture sector’s ability to serve its global customers. It would also damage the industry’s reputation as a reliable supplier.
“It will add to the multiple and substantial challenges the grain industry has already faced over the last several years, including drought, multiple extreme weather events and previous labour disruptions,” Flengeris said in an email.
Manitoba is already seeing the impact at elevators, as staff are warning farmers about capacity issues and international customers about the status of their delivery contracts, Jill Verwey, president of the Keystone Agricultural Producers, told CBC Manitoba’s Radio Noon Wednesday.
If trains stop running, Verwey said the supply of fertilizer, fuel and propane shipments will also be affected.
The Western Canadian Grain Elevator Association said its members move roughly $50 million product per day and handle 90 per cent of Canada’s bulk grain exports.
Executive director Wade Sobkowich said grain elevators are trying to get as much product to port for shipment, but if a rail stoppage happens, they’ll lose out on premiums and pay contract penalties.
Sobkowich said transporting the products by train is the fastest, safest and most efficient way. There isn’t a better alternative, he said.
“It takes about 300 trucks to replace one train and even if it were economical, which it’s not, there just aren’t enough trucks to move the product.”
Jochum, along with various industries and associations, are asking the federal government to consider the broad implications of a potential rail stoppage and evoke binding arbitration or introduce back-to-work legislation.
Neither Trudeau or Freeland have shown a willingness to entertain that proposal so far.
WATCH | Manitoba farmer explains impact of potential rail stoppage
For the first time, Canada’s two main railway companies, Canadian National Railway and Canadian Pacific Kansas City, are on the verge of a simultaneous labour stoppage. Some shippers have already diverted goods away from Canadian ports — as calls grow for the federal government to intervene.