Ottawa has sent the rail dispute to arbitration so what happens now?

The federal government has referred the ongoing rail labour dispute to arbitration but that might not guarantee a resumption of service.

Canadian National Railway Co. (CN) and Canadian Pacific Kansas City Ltd. (CPKC) locked out 9,300 engineers, conductors and yard workers Thursday morning after the parties failed to agree on a new contract.

Labour Minister Steve MacKinnon announced Thursday that he would use section 107 of the Canada Labour Code to refer the dispute to the Canada Industrial Relations Board (CIRB) for binding arbitration.

The railway companies and a number of other business advocacy organizations had been calling on MacKinnon to refer the case to arbitration before the lockout. He was rejecting those requests until today and was instead urgingall parties to hammer it out at the negotiating table.

"We have an impasse here. We wanted to give these negotiations the absolute possibility of concluding successfully. We see little prospect of that," MacKinnon said Thursday.

WATCH | Labour minister says federal government is sending rail dispute to binding arbitration:

Labour minister says federal government is sending rail dispute to binding arbitration

5 days ago

Duration 2:15

Minister of Labour Steven MacKinnon says he has directed the Canada Industrial Relations Board to extend the term of the current collective agreements until new agreements have been signed and for operations on both railways to resume forthwith.

Contract talks between the union and the two companies usually take place a year apart, but in 2022 after the federal government introduced new rules CN requested a year-long extension to its existing deal.

This first-eversimultaneous shutdown of both rail networks blocked the movement of roughly $1 billion ingoods.

Mark Thompson, a former labour arbitrator and professor emeritus at the University of British Columbia, said the unprecedented nature of the stoppage pushed the government to act.

"No government of whatever persuasion is going to stand by and let a national [work stoppage] by both railroads go on for very long. The impact on the economy is simply too great," he said.

Lisa Raitt, who served aslabour minister in the government of former prime minister Stephen Harper, said referring the dispute to the CIRBwon't instantly end the work stoppage. She said the companies and the union first have to agree to binding arbitration.

"You can try to get the parties to agree to binding arbitration. Maybe you can write to the CIRB and ask them to impose binding arbitration but there's no way a minister can write a letter and say that everyone goes back to work and I'm sending you to binding arbitration," she said.

"If you find a lawyer who can tell you that it's possible [for the minister to order the parties into arbitration], then I wish I had their advice 15 years ago. But as far as I'm concerned,you aren't able to do that."

On Thursday, MacKinnon stopped short of saying the work stoppage would be ending as a result of his actions.

"We're confident that it will," he said.

"[The CIRB] are independent they have a process that requires consultation with the parties. They will be doing that and rendering a decision, I hope very quickly."

When pressed for a timeline for resumption ofrail operations, MacKinnon said it should happen "within days."

"Again, I want to be deferential to the process that will unfold," he said.

Both rail companies released statements Thursday saying they would restart operations following MacKinnon's announcement, but neither offered a timeline.

Triggeringsection 107 of the Labour Code doesn't prevent a union from striking. TheTeamsters union representing the rail workers said picket lines will remain in place while it considers its next steps.

MacKinnon's predecessor,Seamus O'Regan, referred the labour dispute between WestJet and the Aircraft Mechanics Fraternal Association to the CIRB for arbitration in July. The board still allowed a strike to happen.

O'Regan also asked the board to go to binding arbitration last summer during the B.C. port strike. The parties ended up reaching a deal two days later.

Thompson cautioned that going to arbitration too often could have an impact on future labour negotiations.

"Bargaining can atrophy if the parties are expecting arbitration to solve their problems," he said.

"The government has to take the long view. Every employer association in the country practically has demanded arbitration, but they just want to solve their problem now. Whereas if you're the federal government, you'vegot to worry about the next set of negotiations."

Beyond arbitration, the government also could reconvene Parliament to pass back-to-work legislation.

The Liberals used back-to-work legislation in both 2021 and 2018. Raitt said it might be the only option in this circumstance, given the risk tothe economy.

"I really see no choice for the federal government but to have back-to-work legislation and then a process to settle the collective agreement for the parties," she said.

But Thompson said the government would need to know it had a dance partner in the House of Commons willing to pass the legislation before recalling MPsback to Ottawa for a rare summer sitting.

"No government is going to say 'We're ordering you guys back to Ottawa for legislation,' and then don't have it passed," he said

WATCH |NDP won't 'accept' any interference by feds in rail shutdown, says Singh:

NDP wont accept any interference by feds in rail shutdown, says Singh

5 days ago

Duration 3:27

NDP Leader Jagmeet Singh says he doesnt want to see any move by the Liberal government that interferes with the fair negotiation of a contract. A shutdown of Canadas two main railroads began early Thursday after labour talks fell apart.

The NDP has a confidence-and-supplyagreement with the Liberals that sees its MPs support the minority government on confidence votes. The NDPhascalled on the government not to intervene in the dispute.

On Thursday, NDP Leader Jagmeet Singh accused the federal government of undermining workers.

"The Liberals' actions are cowardly, anti-worker and proof that they will always cave to corporate greed, and Canadians will always pay for it," he said in a statement.

"There will be no end to lockouts now. Every employer knows they can get exactly what they want from Justin Trudeau by refusing to negotiate with their workers in good faith. And that puts the safety of workers and communities at risk."

CBC News has reached out to the Conservatives and the Bloc Qubcois for comment on the railway stoppage but has yet to receive a response.