Labour minister Steve MacKinnon has only been on the job for a few weeks after Seamus O’Regan opted to resign after deciding not to run again in the next election, and already he’s facing his first major test in the potential lockout of employees by both of the major railway companies in this country—Canadian National Railway and Canadian Pacific Kansas City. Both have been in deadlocked negotiations with the Teamsters Canada Rail Conference union for weeks, with the union demanding better wages and benefits as well as better crew scheduling, claiming that the railways want to do away with fatigue management rules. Business lobby groups are already howling about the economic damage that a work stoppage would do across the country, but is MacKinnon going to be able to resolve the situation, or will it degenerate into one where some form of back-to-work legislation is required?

So far, MacKinnon has been pretty adamant that he wants the groups to come to an agreement at the bargaining table, but so far that hasn’t yielded much in the way of results. The railways have both asked for binding arbitration, but so far MacKinnon has resisted that as well, again reiterating the same message about negotiation. So far, this government has been pretty good about respecting that particular ethos (mostly). There have been short strikes in key sectors that have lasted a few days, but in most cases, they have managed to come to an agreement after the labour disruption, which is the whole point—withdrawing labour puts pressure on the companies to be more amenable to compromise, lest the disruption to further economic damage to them. So far, the Liberals’ track record has been pretty consistent on that front, and most of those disruptions have been short-lived.

The exception to this was with the Port of Montreal in April 2021, when the government did pass back-to-work legislation, but as with most things in life, there is a great deal of nuance and context that goes along with what happened. In that particular case, negotiations had been deadlocked for three years, in particular over an issue of job security and extending shifts when the strike happened. But there was also a bigger picture to consider—this was during the height of the pandemic when global supply chains had been massively disrupted, and a further disruption with domestic port operations as exacerbating the problem, affecting not only Canada but our export markets. While the government has normally been willing to accept some level of economic damage in order to drive the best and lasting agreements, this was already at a time when the global economy was in chaos. The other thing to remember is that unlike previous back-to-work bills that happened under the Conservative government, this one did not dictate the conditions of the agreement, generally favouring the employer. The Montreal Port legislation instead mandated mediation and the appointment of a mediator-arbitrator to resolve the issues in the collective agreement, so that it wasn’t the government imposing terms on either the employer or the union.

This week, NDP leader Jagmeet Singh has warned the government that he won’t support any kind of back-to-work legislation that favoured the employer, but doesn’t seem to have read the room where the Liberals are concerned and the fact that they have been the most pro-labour government in decades. Instead, his talking points seem to have been recycled from a decade ago, that they haven’t consistently threatened use of legislation, and that they have been more than willing on most occasions to let there be some economic consequence to ensure that the agreements happen through negotiation. Then again, Singh is also trying to recapture the blue-collar union vote that his party has been in the process of losing for a while now, as the Conservatives try to step in and appeal to those voters, particularly by trying to appeal to the imagined blue-collar values that eschew the kinds of progressivity that the urban academic class has largely captured the NDP with. (The Conservatives may not be successful, however, as those same unions will recall the union-busting legislation the Conservatives pushed through in the Harper era, no matter how much they try to draw a distinction between private sector and public sector unions).

This leaves MacKinnon with some tough decisions in the coming days, as he goes to meet with the representatives of our rail duopoly and the union. He has so far stuck to his guns when it comes to refusing to engage in a way that would appear to favour one side or the other, as binding arbitration might do, but we are also at a time when the economy is in a particularly fragile state as it comes for a “soft landing” from the inflationary spike that the pandemic supply chain disruptions precipitated, whereby we seem to have avoided going into a recession in order to tame that inflation. Rail disruptions do have a huge impact on our economy, because so much of our internal and external trade is dependent on those rail corridors. This federal government did allow for disruptions to happen in early 2020 with Indigenous protests, in spite of the demands for the police to move in and arrest them so that the trains would start moving again, but again, the government has been willing to tolerate a certain level of this disruption for the causes it believes in.

But if the parties in this dispute refuse to reach an agreement after days of a strike, the pressure from the business lobbies that still hold a great deal of sway with federal governments of every stripe will continue to build, and the Liberals are already in a polling deficit. Parliament is still a month away from its scheduled return from the summer break, so any proposed legislation to break the deadlock between the parties would force a recall, leading to even more unhappiness among parliamentarians of all stripes. We’ll see in MacKinnon can navigate this situation with a diplomacy and a sufficiently firm hand, or if this will result in the federal government needing to swallow its idealism and recall Parliament to pass back-to-work legislation.