Fertilizer Canada Warns on Possible CP Rail Strike

Fertilizer Canada is calling on CP Rail and its workers to settle their contract differences, contending that a potential labour disruption during spring seeding could hurt global food security.

Around 3,000 members of Teamsters Canada Rail Conference could be off the job by midnight March 16, with rail services expected to begin slowing as early as March 13 if a new contract agreement is not hammered out in the interim. Union members voted 96% in favour of strike action back in February, with the main issues in the dispute including wages, benefits and pensions.

Fertilizer Canada - which represents domestic manufacturers, wholesale and retail distributors of nitrogen, phosphate, potash and sulphur fertilizers - said in a release Friday a rail strike would further compromise fertilizer supplies at a time when costs are rising sharply and farmers are already having difficulty sourcing product.

With 75% of all fertilizer produced and used in Canada is moved by rail, the industry is dependent on rail to move product across the country and into international markets, which are counting on supplies from Canada, the release said. There is no other alternative transportation method that currently has capacity or can be brought online quickly enough to mitigate the impact of a possible work stoppage, it added.

"The agriculture sector is already experiencing supply challenges compounded by the war in Ukraine and cannot withstand any more disruption to the supply chain without severe consequences for farmers, food security in Canada and worldwide, and the Canadian economy," said Karen Proud, President and CEO, Fertilizer Canada.

Russia is the world’s biggest exporter of fertilizers, but its war with Ukraine has disrupted shipping and driven up prices for natural gas, a key ingredient for fertilizer manufacturing. Western sanctions, including against Russian banks, could further curtail exports by constraining financing. Futures prices for urea fertilizer have jumped 32% since the invasion began on Feb. 24, while diammonium phosphate, or DAP, futures are up 13%, according to Gro Market Intelligence.

Nutrien Ltd., the world’s biggest crop-nutrient producer, last week also expressed its concern to the federal government about a possible strike at CP. Any loss of rail service would impact the movement of fertilizer and other crop chemicals to retail locations across the country at a time when farmers need them most and food prices are already soaring, the company said.