CN strike drags on, hitting grain exports, fertilizer output

Ottawa/Montreal | Reuters — A prolonged strike at Canadian National Railway, the country’s largest railroad, sent further shocks through the economy on Monday with grain shipments scuttled and layoffs planned at fertilizer producers and an auto shipment terminal.

As Canada’s biggest rail strike in a decade entered its seventh day, industry kept pressuring the government to intervene. The Teamsters Canada Rail Conference, the union representing the 3,200 striking CN employees, said it was no closer to an agreement than when its members first hit picket lines.

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The Unifor labour union said 70 employees would be laid off effective Thursday at a Nova Scotia facility contracted by CN to handle vehicles shipped in and out of Canada.

Meanwhile, frustrated farmers facing propane shortages dumped wet corn in front of the prime minister’s local Quebec office and pleaded for the government to intervene.

Striking conductors and yard workers are demanding improved working conditions, including worker rest breaks. The federal government has sidestepped industry calls to force employees back to work, insisting collective bargaining is a quicker solution.

“Every option (is) always on the table, but for the time being we hope that both parties will get to an agreement and that will be the fastest way,” federal Agriculture Minister Marie-Claude Bibeau told reporters in Regina.

Canada relies on CN and Canadian Pacific Railway to move products such as crops, oil, potash, coal and other manufactured goods to ports and the United States. Industry figures show about half of Canada’s exports move by rail, and economists have estimated a prolonged strike could eat into economic growth.

A CN spokesman said company officials continue to negotiate and called for binding arbitration, a demand the union has rejected thus far.

Vessels pile up

The strike left at least 35 vessels waiting at Canada’s West Coast to load grain shipments, Mark Hemmes, president of Quorum Corp., which monitors the movement of Prairie grain for the Canadian government, told Reuters. Hemmes said many of the grain handling facilities at major ports on the West Coast are serviced only by CN.

Shipments from those ports supply international markets, including Asia.

An association of Canadian exporters has declared event of delay, allowing members to avoid contract penalties due to circumstances outside their control.

Nutrien said it was preparing to shut down its largest potash mine, at Rocanville, Sask., for two weeks effective Dec. 2.

The north shore of Port of Vancouver’s Burrard Inlet is home to a major potash and coal export terminal as well as grain terminals operated by Cargill and Richardson International that are normally serviced only by CN.

A “trickle of cars” from CP was reaching the grain terminals, but they are “for all intents and purposes shut down,” said Wade Sobkowich, executive director of the Western Grain Elevator Association.

Cargill spokeswoman Connie Tamoto said the company had taken “mitigation measures” to ensure customer needs are met.

Richardson International did not respond to requests for comment.

Around 300 farmers, angry at a shortage of propane they need to dry grain, gathered with a dozen tractors near Prime Minister Justin Trudeau’s parliamentary office in Montreal on Monday to demand government action to end the strike. Some farmers held bags of grain and signs that read “To dry grain, you need propane.”

CN is a key link in transporting propane to parts of Eastern Canada where it is also used to heat homes and hospitals.

— Reporting for Reuters by Kelsey Johnson in Ottawa, Allison Lampert in Montreal and Arunima Kumar in Bangalore; additional reporting by Rod Nickel in Winnipeg, David Ljunggren in Ottawa and Christinne Muschi in Montreal.

New Brunswick's Crown-owned liquor marketing and distribution company plans a structural overhaul from within over the next one to three years and to study ways it can partner with "third parties." Alcool NB Liquor CEO Daniel Allain emphasized in a release Wednesday that "it is not our focus or our intent to privatize NB Liquor at this time" but agrees "more private-sector involvement in the asset is required." The planned overhaul stems from a review ordered in October 2010 by Premier David Alward, tasking Allain and NB Liquor's board with finding ways to strengthen retail strategies, boost revenue and profits and "improve the culture and governance of the corporation." The corporation's current mandate includes handling wholesale purchase, importation, distribution and retailing for all beverage alcohol in the province, operating 48 NB Liquor stores and supplying 70 private-agency outlets through its central office and warehouse in Fredericton. The corporation in 2011 booked sales of $412.4 million, up 1.3 per cent from 2010, remitting $159.6 million back to the province. Sales included $229.6 million in beer, $92.2 million in spirits and $68.3 million in wines. Allain on Wednesday released the corporation's report from its review, laying out two batches of recommendations: first, to look at "opportunities identified in current operations" and second, to look at "opportunities to partner with third parties." The corporation said it plans to pursue the first group of recommendations over the next 18 to 36 months and take on "further study" of third-party partnerships. Changes to operations from within are expected to include: improvements to the "overall customer experience;" expansion and restructuring of NB Liquor's retail network; investments in technology to improve "efficiency and security;" exploring "cost reductions, internal opportunities and pricing strategies to increase contributions" to provincial coffers; reviewing NB Liquor's governance and moving to a "high-performance culture with focus on long-term returns on investment;" and seeking "changes to the legislative environment" while improving NB Liquor's relationships with other provincial departments. The second group of recommendations proposed that NB Liquor explore "strategic alliances" with other liquor boards in the region, and also explore "monetization" of the corporation while maintaining its provincial ownership. "Stop asking" The Canadian Union of Public Employees (CUPE) Local 963, which represents over 500 NB Liquor staff, said Wednesday that the corporation's review document makes a "convincing business case" for the Crown-owned model. "In the past 10 years, NB Liquor remitted $1.4 billion to the provincial government. In addition, it boasts the lowest cost-to-expense ratio in Canada," union local president Martha Thompson said in a separate release. Each successive New Brunswick government has asked NB Liquor to think about privatization, either through a partial or complete sell-off or by privatizing its retail operations, she said. "We think it's time to stop asking NB Liquor to jump through hoops, and let it do what it does best -- which is providing us with good customer service, social responsibility and reliable steady growth." The Canadian Restaurant and Foodservices Association (CRFA), a longtime critic of the public-sector liquor distribution model, reiterated Wednesday that it considers the province's current liquor system "inefficient" and reliant on a "monopolistic model of price hikes to increase revenue." "Although we're disappointed government did not choose to privatize NB Liquor, we are pleased they intend to increase the level of private-sector involvement," Luc Erjavec, CRFA's vice-president for Atlantic Canada, said in a separate release.

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