Commodity producers relieved CP Rail running after workers sent back to job

Commodity producers are relieved that products such as grain, oil and minerals will be moving again now that operations by Canadian Pacific Railway have resumed after Parliament ordered striking workers back on the job.

The Mining Association of Canada said Friday its member companies will have a backlog as they rely on rail to get supplies to work sites and products to market.

“So a stoppage for a number of days like we’ve seen certainly has an impact,” said Paul Hebert, the mining association’s vice-president of government relations.

“There’s no question there has been a cost but we haven’t quantified it,” Hebert said from Ottawa. “We’re very pleased that we’re going to see a full resumption of service.”

Hebert said he expects it will take about three days or so to get service fully restored. The mining association’s members include Cameco Corp. (TSX:CCO), Barrick Gold Corp. (TSX:ABX) and Teck Resources Ltd. (TSX:TCK.B).

CP Rail (TSX:CPR) resumed operations across its entire Canadian freight network at about 7 a.m. ET Friday.

“Our railway successfully started up operations Friday morning and we are back moving customer shipments across Canada and into the United States,” spokesman Ed Greenberg said.

But Greenberg said it will take some time to safely return to full service and catch up on the backlog.

“Throughout this process, our railway will be working closely with customers,” he said.

The union representing the 4,800 strikers, the Teamsters Canada Rail Conference, asked its members to end their walkout after federal back-to-work legislation became law Thursday night.

The workers, including locomotive engineers, conductors, yard workers and others, walked out May 23, forcing Canada’s second-biggest railway to shut down freight operations.

The Agricultural Producers of Saskatchewan said CP rail moves everything from wheat and barley to canola and flax.

“We depend on them for our living,” association president Norm Hall said from Regina.

“We do export so much of our crop and it has to get to export position and that so rarely happens by truck. It happens by rail.”

The Western Canadian Wheat Growers Association welcomed the news that CP Rail was running again with president Kevin Bender saying he was relieved that service has been restored.

“That’s the word I would use,” Bender said. “I don’t know if Canadians in general realize how dependent we are as country on railways for transportation. As farmers, that’s sort of like a lifeline for us.”

Cenovus Energy Inc. (TSX:CVE) said the resumption of rail service will benefit the oil company.

Cenovus moves about 2,000 barrels of oil per day by rail from its Bakken fields in Saskatchewan. That’s not a lot for a company that produced 156,850 barrels a day in its most recent quarter, but the Calgary-based Cenovus did feel a pinch from the strike.

“We’re pleased that this has come to a resolution and we look forward to working with CP,” said spokeswoman Jessica Wilkinson.

Federal Labour Minister Lisa Raitt has said it will take weeks to clear the backlog.

As an example, Raitt said there were half a dozen ships waiting in Vancouver to be loaded with Canadian grain bound for foreign markets and that eight more ships were on their way to the port.

The back-to-work law sends the labour dispute to a government-appointed arbitrator, who has 90 days to impose a deal.

The union said that while it disagreed with the law it was advising members to obey it and report for work Friday morning.