Law prohibiting replacement workers will worsen Canadian services, says MEI

• Without replacement workers, CPKC and CN strike could impact commuter rail in large Canadian cities.

Montreal, June 3, 2024 – Ottawa’s proposed ban on the use of temporary replacement workers during work stoppages will significantly disrupt vital services, asserts the Montreal Economic Institute in a study released this morning.

“Banning the use of replacement workers for federally regulated industries will enable small groups of unionized employees to stop key transportation infrastructure from working,” explains Gabriel Giguère, public policy analyst at the MEI and author of the study. “Our trains, airports, and seaports could effectively be at risk of shutting down whenever a union needs to settle a wage dispute.”

On May 27, the House of Commons adopted Bill C-58, which will prohibit the use of temporary replacement workers during labour disputes between employees and employers in federally regulated sectors once it takes effect, 12 months after receiving royal assent.

Unionized workers will continue to be able to seek temporary employment elsewhere, whereas federally regulated employers will be unable to continue operations, which would impact the entire Canadian economy.

This announcement comes just as unionized employees of Canadian Pacific Kansas City Limited (CPKC) and Canadian National (CN) prepare to strike simultaneously.

The adoption of Bill C-58 ensures that work stoppages in sectors including banking, telecommunications, and rail and air travel will be even more detrimental to the Canadian economy than under the current regulatory framework.

Quebec and British Columbia have similar laws in place provincially, and these tend to make work stoppages longer and more frequent there than in provinces without such legislation.

In the context of upcoming rail strikes, the banning of replacement workers means that thousands of Canadians who use commuter rail to get to work would be stranded or would add to road congestion.

The researcher gives the example of CPKC’s 80 Calgary-based rail traffic controllers which, if they go on strike after the law goes into effect, would prevent commuter rail traffic on a number of important transit lines.

“Trains can’t move on a railroad unless you have rail traffic controllers, and a number of key transit lines use CPKC’s infrastructure,” explains Giguère. “In the absence of replacement workers, any strike action on their part could shut down TransLink’s West Coast Express, GO Transit’s Milton Line, and Exo’s Candiac, Saint-Jérôme, and Vaudreuil/Hudson lines.

“That’s a whole lot of power to put in the hands of 80 or so unionized staff.”

The MEI study is available here.

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The MEI is an independent public policy think tank with offices in Montreal and Calgary. Through its publications, media appearances, and advisory services to policy-makers, the MEI stimulates public policy debate and reforms based on sound economics and entrepreneurship.

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