Canada Rail Strike Ends With CN, Union Deal

MONTREAL, WINNIPEG (Reuters) — 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 transportation of oil, chemicals, heating fuel, crops and more. 

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% 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 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 C$1 billion ($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% 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.

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.”

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