The union representing Canada rail workers on Friday challenged the federal government’s directive imposing final binding arbitration to resolve labour bargaining, according to local media, and instead issued a strike notice set to commence on Monday.

The government’s directive Thursday came hours after an employer-led lockout of more than 9,000 workers at CN Rail and Canada Pacific Kansas City Ltd., the two largest rail operators in Canada, responsible for moving one billion dollars worth of goods each day. Despite months of negotiations, the parties could not reach an agreement.

Minister of Labour Steven Mackinnon intervened in the dispute by using powers granted under section 107 of the Canada Labour Code. He ordered binding arbitration on all parties, extending the terms of the collective agreement until a new agreement is reached.

The minister justified the government’s extraordinary intervention in this labour dispute because they needed to “secure industrial peace and deliver the short and long-term solutions in the national interest.” Section 107 of the Canada Labour Code, allows the minister to “do such things as to the Minister seem likely to maintain or secure industrial peace and to promote conditions favourable to the settlement of industrial disputes.” It also allows the minister the power to “refer questions to the Board, or direct the Board to do such things as the Minister deems necessary.” Through this power Mackinnon ordered the CIRB, an independent administrative tribunal, to prioritize this dispute and provide a final binding decision as soon as possible. Hearings began yesterday, with a final decision to be issued in the near future.

Such swift and significant government involvement in the labour negotiation process likely came about because this rail crisis is the first time in Canada when both rail lines have been stopped at the same time, with tremendous economic consequences. Normally, there is a one-year gap between the two employers to allow for contract negotiations and to prevent this exact scenario from occurring. The dual stoppage came about because CN extended its collective bargaining agreement by one year.

In Canada, rail services perform an essential function, moving goods such as grain, oil, and produce throughout the country and across the border for trade. CN Rail and Canada Pacific Kansas move one billion worth of goods each day. They also own rails used by commuter lines in Ontario, Quebec, and British Columbia, which has led to shutdowns of those services.