MONTREAL, QUEBEC/WINNIPEG MANITOBA – Canada’s longest railroad strike in a decade ended on Tuesday as Canadian National Railway Co., the country’s biggest railroad, reached a tentative agreement with workers that would help restore grain exports and transportation of chemicals and heating fuel.
Shippers celebrated the end of the eight-day strike, which had cost them sales and raised their expenses.
News of a deal, which must still be ratified by union members, sent CN shares up more than 2 percent in morning trading.
The deal will send thousands of unionized workers back to their jobs on Tuesday, ahead of a vote expected within eight weeks, CN said.
Canada relies on CN and Canadian Pacific Railway to move products like crops, oil, potash, coal and manufactured goods to ports and the United States.
While industry figures show about half of Canada’s exports move by rail, some economists estimated the strike would have a limited impact on the broader economy.
Brian DePratto, a senior economist at TD, estimated the dispute would cost less than 1 billion Canadian dollars ($751.82 million) in direct impact and weigh on fourth-quarter growth by a modest 0.1 percentage points.
“We want to thank our customers for their patience and support and assure them that CN is preparing to resume full rail operations as soon as possible,” J.J. Ruest, chief executive of Montreal-based CN, said in a statement.
CN shares have rallied 4 percent since hitting a near three-week low on Thursday at C$118.50.
Details of the agreement were not available. Some 3,200 striking conductors and yard workers had been demanding improved working conditions, including worker rest breaks.
The tentative deal brings relief for Prime Minister Justin Trudeau’s new government, which was under pressure to intervene and stop the strike. On Monday, farmers facing propane shortages dumped wet corn in front of Trudeau’s local Quebec office.
“Now we can hope that things can get back to normal in quick fashion. It’s cost a lot of money to farmers already,” said Markus Haerle, chairman of the Grain Farmers of Ontario.
Wet conditions have stalled the harvest across much of Canada, including much of Haerle’s corn crop near St. Isidore, Ontario. Those crops must be dried before they can be sold, but the rail strike held up deliveries of propane, forcing farmers to use costlier alternatives.
Teamsters Canada President Francois Laporte praised Trudeau’s Liberal government in a statement for allowing the workers to reach a negotiated settlement with CN.
“Previous governments routinely violated workers’ right to strike when it came to the rail industry,” he said. This government remained calm and focused on helping parties reach an agreement, and it worked.”
“This is great news but there’s still a number of difficult days ahead,” added Bob Masterson, chief executive of the Chemistry Industry Association of Canada.
He said some plants producing hazardous chemicals had slowed production during the strike. Based on past rail disruptions, CN is likely to start moving critical commodities first, such as propane for farms and homes and chlorine for drinking water, leaving other shippers to wait days or weeks for service, Masterson said.
Brendan Marshall, vice-president of economic and northern affairs at the Mining Association of Canada, said miners were facing hefty costs due to lost sales and plant disruptions and that it could take a week for every day of disrupted service to restore normal operations.