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Locked-out workers picket the Canadian Pacific Railway headquarters in Calgary, on March 20.Jeff McIntosh/The Canadian Press

A work stoppage at Canadian Pacific Railway Ltd. CP-T halted freight trains for a second day on Monday, leaving large swaths of Canada’s manufacturing and mining sectors without viable ways to reach customers at a time when supply chains are already being strained by the pandemic and the war in Ukraine.

CP operates a domestic service that reaches from Vancouver to Saint John, moving everything from wheat and ore to consumer goods and food. Many of its customers have no alternative to shipping their goods by train, because rail cars have more capacity than other types of shipping containers and CP has exclusive access to some areas of the country.

Lobbyists and business groups are urging the federal government to legislate an end to the work stoppage, but Labour Minister Seamus O’Regan signalled on Monday that he is not prepared to introduce such a law.

“Our federal mediators continue to work with the union and the company in their negotiations,” Mr. O’Regan said in a statement. “Our government believes the best deals are reached at the table.”

Mr. O’Regan is in Calgary and in contact with CP and the Teamsters Canada Rail Conference union, which represents about 3,000 train engineers, conductors and yard workers who began a work stoppage early Sunday morning after contract talks broke down.

Wages and pensions are the main issues at the bargaining table, both sides say.

“We have shut down Canadian operations,” said Patrick Waldron, a CP spokesperson. The union did not immediately respond to a request for comment.

Some major shippers said they are taking steps to minimize disruptions to their operations. Chris Stannell, a spokesperson for Teck Resources Ltd., said his company is running its mines but is storing coal on site instead of loading it onto rail cars for shipping.

“We are monitoring the situation closely and will take further steps as necessary,” he said. “Any stoppage of rail service is negative for the economy as a whole, including our business. As such, we look forward to a prompt resolution.”

The pressure is on in Ottawa today as a CP Rail work stoppage enters its second day.Jeff McIntosh/The Canadian Press

Stellantis NV, which makes Chrysler and Dodge vehicles in Brampton and Windsor, Ont., and car parts in Toronto, is looking to “other transportation providers to mitigate any impact to our operations or our customers,” said LouAnn Gosselin, a spokesperson for the company. She declined to elaborate.

The stoppage at CP marks the latest in a series of woes that have recently beset Canada’s supply chains. The pandemic slowed much of the global shipping industry by clogging ports, halting ships and delaying the delivery of consumer and industrial goods. Flooding in parts of British Columbia in the fall added another layer of disruption, washing out railways and roads.

In 2019, Canadian National Railway Co. train conductors and yard workers went on strike for eight days. In February, protesters opposed to pandemic health care measures blocked Windsor’s Ambassador Bridge to Detroit for several days, halting traffic on a vital trade route between Canada and the United States. And then, at the end of February, Russia invaded Ukraine, disrupting international markets for vital resources, including fuel.

An employee boards a Canadian Pacific Railway locomotive at a yard in Calgary on March 18.Jeff McIntosh/The Canadian Press

With CP trains not running, industry groups say further economic damage is possible. “As the single largest industrial customer group of Canada’s railways, the mining industry has seen firsthand how detrimental unpredictable work stoppages are to Canada’s reputation as a reliable trading partner,” said Pierre Gratton, head of the Mining Association of Canada.

“With global supply chain fluidity having been heavily strained in recent months due to sharp swings in consumer demand during the pandemic and disruptions to global shipping, this strike could not come at a worse time.”

Perrin Beatty, head of the Canadian Chamber of Commerce, predicted the CP work stoppage will have “deep and adverse” effects on shippers, and harm Canada’s reputation as a reliable trading partner.

Speaking to the House of Commons on a video feed on Monday, Mr. O’Regan said the CP disruption’s timing – with both the pandemic and Russia’s invasion of Ukraine already tangling supply chains – was poor.

“I am urging the parties to reach an agreement,” he said.

With a report from Robert Fife

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