The Saskatchewan Wheat Development Commission (Sask Wheat) is calling on the Government of Canada to immediately enact binding arbitration to end the dual work stoppage at CN and CPKC.
Sask Wheat represents the wheat and winter cereals producers of Saskatchewan for whom timely, responsive and efficient rail service is fundamental to crop marketing and profitability. In 2023, Saskatchewan produced over 40 percent of the spring wheat and 80 percent of the durum grown in Canada, the majority of which is moved by rail to ocean ports and then to export markets. On average, over the past 10 crop years, over 200,000 tonnes of wheat and durum per week is shipped from primary elevators in the province during the harvest period. At current prices, this represents a value of almost $55 million per week.
The work stoppage will have a direct effect on Saskatchewan farmers’ ability to deliver grain, leaving many producers unable to meet their cash flow requirements. “The situation is exacerbated given that harvest has started, and farmers are unable to move grain from previous harvests to make room for this year’s crop or deliver grain that has been sold for delivery periods this fall,” said Sask Wheat chair, Jake Leguee. “Not only will this create significant storage capacity issues on farm, but cash flow issues will also arise as bills for this year’s crop come due and expenses begin to accrue for next year.” As farmers begin planning for next year’s crop, the work stoppage will also disrupt supply chains for key inputs, including fertilizer, creating more uncertainty for producers on availability and pricing.
Saskatchewan farmers are captive to rail to move their grain to export position, and do not have the option of using other transportation methods during a service disruption. As an additional 5,000 trucks would be needed to move approximately 200,000 tonnes of wheat and durum per week, there are simply not enough trucks to fill this demand and Saskatchewan’s distance from shipping locations would make it cost prohibitive.
Without access to CN and CPKC rail service, Western Canada’s grain marketing system will simply come to a halt. Large amounts of grain will remain on farm and other grain will be trapped in the commercial handling system. The flow of grain through the ports and onto vessels will also be stopped as port storage is not replenished. If the rail service disruption continues, existing contractual obligations with Canada’s international grain customers will not be met and new sales will be forgone. “The immediate damage will be widespread across the Canadian economy,” said Leguee. “In addition, Canada’s reputation as a reliable supplier of high-quality grain to international markets will be damaged with future repercussions.”
Even once the work stoppage is resolved, it will take weeks or even months to get the grain handling system operating at full capacity again. Every day of rail service disruption for a single carrier adds approximately a week of recovery time, and this will continue to impact farmers’ ability to deliver grain and hurt profitability. Therefore, Saskatchewan wheat and winter cereals producers are depending on the Government of Canada to take decisive actions to solve this unprecedented dual rail service disruption quickly.
FORESTRY SECTOR ALSO FACING DISRUPTION
Canada’s forestry sector is hard hit by the work stoppage now affecting rail service across the country, according to Forest Products Association of Canada (FPAC) President and CEO Derek Nighbor.
“A shutdown of Canada’s rail network has the potential to shut down many of our mills – which would be a blow to forest sector workers, contractors, their families, and the local businesses that rely on their paycheques, at a time when business is already tough,” said Nighbor.
CN and CPKC are essential partners to most of Canada’s sawmills and pulp and paper mills, Nighbor pointed out
“Having both railways in a position to grind operations to a halt at the same time reeks of a deliberate attempt to hold the Canadian economy hostage and is completely unacceptable,” said Nighbor. “At a time when governments, industry, and workers are focused on bringing more made in Canada products to the world, it’s a black eye on Canada’s reputation as a reliable and serious business partner.”
Nighbor said in thirteen of the last fourteen years, the forestry sector has faced some kind of strike, lockout, or other serious disruption along Canada’s national transportation system and it’s beyond tiresome.
“It’s frustrating for workers and small businesses who are innocent bystanders and what’s not being talked about enough is how it’s a massive drag on Canada’s competitiveness position and international reputation,” he said. “The federal government has an obligation to act immediately and restore this critical service.”