Ottawa must adopt binding arbitration to stop labour disputes, Senate report says

OTTAWA — A Senate committee is recommending that Ottawa take bold action including binding arbitration to ensure that labour disputes no longer disrupt Canadian supply chains, steps that would mark fundamental changes to labour relations in two critical sectors.

In a new report released Thursday, the Senate Committee on Transport and Communications concluded that the federal government needs to make aggressive changes to the labour laws that govern the rail and marine industries so that there are more alternatives to strikes and lockouts.

With a number of collective agreements in the two federally regulated sectors set to expire this year, further disruptions present a key obstacle to trade diversification and expansion, according to the report.

The Senate report also argues that labour disruptions affect Canada’s reputation as a reliable trade partner.

It recommends that Ottawa modernize the collective bargaining process in the two key sectors to create alternative mechanisms to resolve labour disputes, including mediation, arbitration and even binding arbitration.

In 2015, the Supreme Court of Canada ruled that the right to strike is constitutionally protected but not absolute.

“Tariffs and trade tensions are already straining Canada’s economy — another rail or port strike could be disastrous,” said Sen. David Wells, the committee’s chair, in a release. “We need a new way to resolve work stoppages to keep our railways and ports open for business.”

Rail and marine services are critical infrastructure to both importers and exporters for many sectors of the Canadian economy, including retail, food manufacturing, mining, forestry, auto, energy, metal refining and defence. The infrastructure sectors need to be reliable and considered part of the national interest, the report says.

The committee noted that it heard from business groups and others who explained the importance and fragility of modern supply chains. “When one part is shut down, it can have a domino effect on the others, disrupting the entire chain,” the committee wrote.

But Christopher Monette, a spokesman for Teamsters Canada, the country’s largest union for rail industry workers, said the effects of the labour disruptions are being exaggerated by business groups and that workers have the right to strike. More than 95 per cent of the collective agreements in the federally regulated sectors are renewed without strikes, Monette added.

“There is nobody around the world saying Canada is not a reliable trading partner.”

The Canadian Labour Congress also said the committee got it wrong, and called on the government to reject the report.

The Carney government has made the expansion of trade a top priority in the wake of tariffs on key Canadian industrial sectors by U.S. President Donald Trump.

Carney has repeatedly said that Canada needed to diversify its exports, setting a target of doubling non-U.S. exports over the next decade.

Canadian trade flows have at times been hindered, however, because of labour disputes, including at key ports at Vancouver and Montreal in the fall of 2024, at Canada’s two largest rail carriers, CN and CPKC, for several hours in 2024, and during a 10-day strike at British Columbia ports in 2023.

The committee report, which has no direct or automatic effect on government policy, also recommends the establishment of a permanent, independent supply chain tribunal whose members are experts in the marine and rail sectors, and that the tribunal use alternative models to resolve labour disputes, including mediation and arbitration.

The report also recommends that if mediation and arbitration don’t lead to a deal when the matter is deemed to be in the national interest, the government may call for binding arbitration.

National Post

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