CN Strike Could Leave $3.1-Billion Hole in Canadian Economy
The ongoing rail strike that began this week is set to take a multibillion-dollar toll on Canada’s economy if it is not resolved by the time parliament resumes sitting next month.
Conductors and Yard Operators Walk Off the Job
Conductors and yard operators at Canadian National Railway Co. walked off the job on Tuesday, snarling shipments of key exports. The disruption has already started to impact the country’s economy, with Toronto-Dominion Bank economists Brian DePratto and Derek Burleton analyzing that if the strike were to last until December 5th, when lawmakers resume work in Ottawa after an election in October, it could crimp output by as much as $3.1 billion (US$2.3 billion). This is equivalent to a nearly one-quarter percentage point loss in the fourth quarter.
Impact on Economy
The longer the strike continues, the bigger the knock-on effects are likely to be, particularly for sectors like agriculture and chemicals. As DePratto mentioned by email on Thursday, "So the Dec. 5 impact analysis may be somewhat conservative." The Canadian economy is already decelerating amid global trade tensions, with a consensus estimate of gross domestic product in the fourth quarter standing at 1.3 per cent, according to a Bloomberg survey before the strike began.
Prime Minister Justin Trudeau Faces Calls for Legislative Intervention
Prime Minister Justin Trudeau, who was re-elected to a second term but failed to win any districts in two energy and agriculture-rich western provinces, is facing calls to legislate an end to the strike. His transport minister has stated that the government prefers a negotiated settlement.
Canada’s Largest Railway Responsible for Shipping Key Exports
CN, Canada’s largest railway, is responsible for shipping oil, grain, and consumer goods from the inland prairies to the U.S. and other ports for export around the world. A lengthy CN strike could hit the country hard, with no remedy available from Parliament.
Economic Growth Already Decelerating Amid Global Trade Tensions
The Canadian economy is already experiencing a slowdown in growth due to global trade tensions. The consensus estimate for gross domestic product in the fourth quarter stands at 1.3 per cent, according to a Bloomberg survey before the strike began. A lengthy CN strike could exacerbate this trend and have a significant impact on Canada’s economic growth.
Toronto-Dominion Bank Economists Analyze Impact
DePratto and Burleton analyzed that if the strike were to last until December 5th, it could crimp output by as much as $3.1 billion (US$2.3 billion). This is equivalent to a nearly one-quarter percentage point loss in the fourth quarter.
Impact on Sectors Like Agriculture and Chemicals
The longer the strike continues, the bigger the knock-on effects are likely to be, particularly for sectors like agriculture and chemicals. As DePratto mentioned by email on Thursday, "So the Dec. 5 impact analysis may be somewhat conservative."
Canadian Economy Already Experiencing a Slowdown in Growth
The Canadian economy is already experiencing a slowdown in growth due to global trade tensions. The consensus estimate for gross domestic product in the fourth quarter stands at 1.3 per cent, according to a Bloomberg survey before the strike began.
CN Strike Could Hit Country Hard with No Remedy Available from Parliament
A lengthy CN strike could hit the country hard, with no remedy available from Parliament. Prime Minister Justin Trudeau is facing calls to legislate an end to the strike, but his transport minister has stated that the government prefers a negotiated settlement.
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