Prime Minister Justin Trudeau should step in and end a rail strike before Alberta’s hard-hit agricultural and energy industries are further damaged, said Red Deer County Mayor Jim Wood.
In Alberta, oil and gas and agriculture are akin to “essential services,” and railways are vital to their success, said Wood on Tuesday.
About 3,200 Canadian National Railway Co. employees went on strike Tuesday after the union and rail company failed to reach a deal by a midnight deadline.
Conductors, trainpersons and yard workers hit the picket lines, halting freight trains across the country.
“For farmers, it’s huge,” said Wood, who farms in the Delburne area. Agriculture producers rely on trains to move their grain to market.
Besides lost sales for farmers, the reputation of the industry as a whole takes a beating if contracts can’t be fulfilled for customers, affecting relationships that took years to develop.
Anything that ties up grain in elevators hurts producers’ cash flows, which depend on them selling their products when they want to sell them, he said.
The energy sector will also be hit hard by any disruption.
“So much of our oil and gas is transported by rail due to the lack of pipelines,” he said.
The strike could not be coming at a worse time. The oil and gas industry’s struggles have been ongoing for years, and agriculture is coming off a tough harvest cut short by an early winter, which meant a lot of crop has been left on the fields.
Much of the canola crop harvested has high moisture levels, which means it cannot be left in elevators for too long before it must be moved to preserve quality.
Wood said the prime minister should order workers back to work and make the two sides sit down to resolve their differences without stopping rail traffic.
“Any stoppage just takes away the mood to invest in Alberta. It’s just one more thing that puts another nail in the coffin.”
Alberta energy and agriculture ministers asked the prime minister to recall Parliament ahead of its scheduled return Dec. 5 and enact emergency back-to-work legislation.
“Any disruption in shipments would have serious consequences for an economy that is already dealing with severe bottlenecks due to cancelled and delayed pipelines,” Energy Minister Sonya Savage said in a release.
Said Agriculture Minister and Innisfail-Sylvan Lake MLA Devin Dreeshen: “We have seen the severe consequences of rail backlogs before. Farmers don’t need the added pain from compounding rail delays, especially after this difficult harvest. Now is the time to act.”
Recent wet Prairie weather has produced a crop with more mildew, sprout damage and frost, which will fetch lower prices and affect all players along the supply chain, said Wade Sobkowich of the grain elevator association.
Canola exports have also slumped following China’s ban on the product.
The threat of a strike has already had an impact, as grain companies and foreign importers cut back on orders to avoid paying contract extension fees, demurrage charges, “or, God forbid, defaulting on a contract,” Sobkowich said.
CN services about half the elevators in Western Canada, on top of exclusive access to the grain terminal on Vancouver’s North Shore and the port in Prince Rupert, B.C.
“This strike comes at a terrible time for agriculture,” said Jeff Nielsen, head of the Grain Growers of Canada.
— With files from The Canadian Press