Canada's two major railways, Canadian National Railway (CN) and Canadian Pacific Kansas City (CPKC) are moving to restart operations after government intervention quickly ended a shutdown in the early hours of August 22.

The Canadian government said it would ask the country's industrial relations board to issue a back-to-work order, imposing binding arbitration to resolve the dispute and kickstart rail shipments once again.

Canada's two major freight railroads, CN and CPKC, locked out around 9,300 union workers after midnight on Thursday after failing to reach a last-minute deal with the Teamsters union. This disruption would have added further pressure on supply chains and threatened to damage trade in Canada and the US.

CN, CPKC end lockout

CN said that effective 18:00 ET, it ended its lockout and immediately initiated its recovery plan. 

"As CN awaits the formal order from the Canada Industrial Relations Board (CIRB), the Company is making this decision to expedite the recovery of the economy," it said in a statement.

It noted, however, that while it is satisfied that this labour conflict has ended, the company is "disappointed" that a negotiated deal could not be achieved at the bargaining table despite its best efforts. A CN spokesperson had said that it could take "a week or more" to catch up on shipments affected by the stoppage.

CPKC said it is also preparing to restart railway operations in Canada following the Canadian Minister of Labour’s announcement that he will exercise his authority under Section 107 of the Canada Labour Code to direct the Canada Industrial Relations Board (CIRB) to impose final, binding arbitration and for railway operations to resume forthwith.

CPKC said it will follow the order of the CIRB once it executes the Minister's direction.

"Our teams are already preparing for the safe and orderly resumption of our rail network, and further details about timing will be provided once we receive the CIRB’s order," CPKC said in a separate statement.

Keith Creel, CPKC president and CEO, stated that government intervention acknowledges the significant impact of a potential railway work stoppage on the Canadian economy and North American supply chains.

"The government has acted to protect Canada's national interest. We regret that the government had to intervene because we fundamentally believe in and respect collective bargaining; however, given the stakes for all involved, this situation required action," Creel said.

Canada's Labour Minister, Steven MacKinnon, said the move to enforce final, binding arbitration in the dispute between the Teamsters union and the two companies, CN and CPKC, was the most effective approach to resolve such conflicts, citing how the possible impact of the lockout is too widespread to overlook.

Credit rating agency Moody's warned that the freight rail shutdown could cost the Canadian economy US$341 million per day.