Thursday, May 31, 2012

Canada's Parliment Expected to Pass Bill Ordering Striking CP Rail Employees Back to Work

Canadian lawmakers are expected to pass a back-to-work bill that would get Canadian Pacific [NYSE: CP- TSX: CP] trains rolling by the weekend and order striking Canadian Teamsters back to work on Thursday.

The striking Canadian rail workers have been working without a contract since December 31st. At issue when the Teamsters Canada workers called a strike last week was a new contract and pension funding reductions of up to 40%. Canada's Conservative government has previously passed similar back-to-work legislation to end strikes at Canada Post and Air Canada [TSX: AC-A] in recent years.

Trains from Canada's second-largest railway ground to a halt on May 23rd, severely curtailing CP Rail's operations on the American side of the border as well as those of shippers and railways that interchange with CP Rail.

The Montreal, Maine & Atlantic, which utilizes trackage rights over CP Rail at the western end of the MM&A system near Montreal, has temporarily laid off 59 employees and re-routed some interchange traffic to the Vermont Railway via Newport, VT. Canadian Pacific is responsible for dispatching trackage in and around the St Jean, Quebec interchange. While an agreement to keep commuter trains in Montreal, Toronto and Vancouver operating during the strike had been reached shortly beforehand, the MM&A unsuccessfully sought a court injunction to allow the regional railroad to access Canadian National for interchange in Montreal.

According to Kevin Burkholder's Eastern Railroad News, CP Rail, the Montreal Maine & Atlantic and JD Irving's New Brunswick Southern have been gearing up to handle unit trains of crude oil from Saskatchewan to Irving's St John, NB refinery. Earlier this month, Canadian Pacifc was gearing up to ship 120-car trains of crude oil from the North Dakota side of the Bakken shale to refineries in the northeastern United States.

Earlier this year, Canadian labor groups were handed a major setback when EMD's parent company Caterpillar [NYSE- CAT] decided to shutter their London, Ontario plant and shift production to Muncie, IN after a months-long labor dispute with workers at the plant represented by the Canadian Auto Workers.

[Hat tip- Eastern Railroad News; Labor Union Report]

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