The Government of Canada is using its legislated powers to put an end to the unprecedented complete shutdown of Canada's freight railways.

Federal Minister of Labour Steve MacKinnon announced Thursday afternoon that the federal government will use its authority under Section 107 of the Canada Labour Code to intervene in the labour dispute between Canadian Pacific Kansas City (CPKC) and Canadian National Railway (CNR) — the nation's two main railway operators — and Teamsters Canada Rail Conference (TCRC).

This intervention, a direction to the Canada Industrial Labour Relations Board (CILRB), requires the two railway companies and the union to enter into binding arbitration and requires workers to go back to work and restart the railway operations.

"I'm proud obviously to be part of a government that has done a lot for the labour movement and is totally committed to collective bargaining. Collective bargaining is not easy, but when parties put in the work at the table, our economy is always better off as a result," said MacKinnon during a press conference Thursday afternoon.

"In the current collective bargaining negotiations between Canadian National Railway, Canadian Pacific Kansas City, and the Teamsters Canada Rail Conference, an agreement has so far proven elusive."

"These collective bargaining negotiations belong to these parties, but their effects and impacts to the current impasse are being borne by all Canadians, and there is an impasse. As the Minister of Labour, I'm using my authorities under the Canada Labour Code to secure industrial peace and deliver the short- and long-term solutions that are in the national interest."

MacKinnon notes that under his authority, he directed the CILRB to temporarily extend the expiring term of the current collective agreements until new multi-year contracts are signed.

But it is unclear when exactly the railways will restart operations. It is also expected to take some time for the railways, ports, warehouses, and long-haul trucking operations to catch up with the backlog, with preparations for a lockout or job action beginning more than a week ago, including the practice of diverting shipments away from Canada.

Thursday's intervention follows numerous calls by businesses, business advocacy groups, and provincial governments for the federal government to use its powers to put an end to any lockouts and job action.

The federal government is invoking its powers less than 24 hours after CNR and CPKC escalated the labour dispute by locking out employees, starting at 12:01 a.m. Thursday. This also follows the union's 72-hour notice of strike action to CPKC last Sunday.

TCRC was engaged in separate negotiations with CNR and CPKC, with the union representing a combined total of nearly 10,000 members who work in crucial positions such as locomotive engineers, conductors, train and railway yard workers, and railway traffic controllers.

The historic shutdown of Canada's freight railways has also curtailed the public transit commuter rail services of the West Coast Express in Vancouver, GO Train in Greater Toronto, and Exo in Greater Montreal, as these services lease track time from the companies. Some VIA Rail services within Ontario have also been impacted.

With much of Canada's freight moved by the railways owned and operated by CNR and CPKC, the shutdown of the lines over a prolonged period would cost the Canadian economy billions of dollars.

It would have a profound impact on international trade, logistics, supply chains, and manufacturing, and leading to added transportation costs for businesses to find an alternative way of transporting goods.

Canada's major ports also depend on freight railways for a significant proportion of how cargo and goods are loaded and unloaded on ships. The railway stoppages could quickly congest the major ports of Vancouver, Prince Rupert, and Montreal.

The current railway disruptions follow the Summer 2023 port workers strike that significantly disrupted the operations of the Port of Vancouver, which is already ranked among the world's worst ports for productivity.

"This afternoon's announcement from the federal government is welcome news. A prolonged work stoppage would have been disastrous for our national economy and our reputation as a trading partner," said Bridgitte Anderson, president and CEO of the Greater Vancouver Board of Trade, in a statement this afternoon.

"Additionally, it was regular Canadians and small business owners who stood to bear the worst impacts, from loss of income to increased costs of everyday goods," said Anderson.

"This work stoppage had been brewing for months, and millions worth of goods and products had already been diverted from Canada as companies prepared for it," she continued.

"We are also not fully out of the woods as other labour disputes are threatening our West Coast ports. Moving forward, we urge the federal government to use this example to establish a framework for future actions for other nationally significant sectors."