Finance Minister François-Philippe Champagne, who met with Chinese Vice Premier He Lifeng, told reporters he also discussed the impact of geopolitical tensions on the oil and gas market and how China sees Canada as a stable energy supplier.

“We are becoming a partner of choice,” he said.

WHY IT MATTERS: While China has lowered levies on Canadian agricultural products like canola, it continues to charge a 25 per cent tariff on Canadian pork.

The two officials also agreed to hold high-level economic and financial dialogue in the second half of this year, according to an official Chinese summary of the meeting.

Champagne said the discussions centred on the financial services sector but addressed trade in energy and pork, as well as fair labour practices.

“Canada puts a lot of importance on supply chain integrity and that our bilateral trade needs to be conducted in accordance with international standards,” Champagne said.

Canada, like China, has been targeted with tariffs by U.S. President Donald Trump since his administration took office in January 2025. Strained U.S. trade relations have posed a major challenge for the Canadian economy.

Among the Trump administration’s actions, the U.S. Trade Representative’s office in March said it initiated a second set of unfair trade practice probes of 60 economies, including Canada and China.

Tariffs on Canadian pork discussed

China is Canada’s second-largest trade partner with about C$120 billion of bilateral trade. Canada aims to increase its overall exports to China by 50 per cent by 2030.

Prime Minister Mark Carney met with Chinese President Xi Jinping in January as Ottawa works to diversify trade away from its largest partner, the United States.

While China suspended some agricultural levies on Canada following Carney’s visit, Beijing still has a 25 per cent tariff on imports of Canadian pork, which Champagne said he raised during the meetings.

“Part of my message to the Chinese side was, really, we need to get to a point where we remove these trade irritants,” he said. “I’m leaving Beijing tomorrow with the feeling that we have laid the foundation.”

Champagne added that the automotive sector was not discussed, following reports that Stellantis was reviewing options for building electric vehicles in Canada with Chinese partner Zhejiang Leapmotor Technology.

He said Stellantis would need to live up to its obligations on investments and workers in Canada.

— Additional reporting from Reuters’ Beijing newsroom

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Paul Boucher, president of the Teamsters Canada Rail Conference, also said the union would work with other labour groups as it mounts a legal challenge to a Saturday decision that halted work stoppages at the country’s two largest railways and imposed arbitration.

While the Teamsters will obey the order to return to work, the union has warned it could lead to the imposition of future contracts, eroding workers’ bargaining power. The decision comes as Air Canada pilots press for a new contract and can commence job action as early as mid-September if there is no agreement with the country’s largest carrier.

Air Canada said on Sunday its intent is to reach a negotiated settlement with the pilots over the coming weeks.

“Any federally regulated company, it’s a win for them at this point,” Boucher told Reuters in his first interview since the Thursday lockout. “This is disastrous for labour, for workers.”

The Canada Industrial Relations Board made the decision after Labour Minister Steven MacKinnon asked it on Thursday to end an impasse in separate talks between the Teamsters, Canadian National Railway and Canadian Pacific Kansas City.

The dispute, which triggered a first-ever lockout of Teamsters workers on Thursday at both freight rail carriers, led to unprecedented disruptions that threatened to hammer Canada’s export-driven economy, leading agricultural businesses to plead for relief.

Tim Perry, president of the Air Line Pilots Association Canada, which represents Air Canada pilots, said the union is concerned.

“The new Minister of Labour does not trust the Canadian laws governing collective bargaining, nor does the government he represents respect the constitutional rights of workers,” Perry said in a statement.

A spokesperson for Canada’s labour minister declined to comment on whether the decision to impose binding arbitration on railways would serve as a precedent in other sectors, including aviation.

CN has said the company would have preferred a negotiated agreement but was satisfied that the labour stoppage is over. Spokesperson Jonathan Abecassis said on Sunday that CN tried to get an agreement for nine months and made five offers that would have improved wages and working conditions but the union did not engage. A CP spokesperson said it regretted that the government had to intervene and fundamentally believes in and respects collective bargaining.

Both railways have said they are focused on restoring service, with the Teamsters calling off a CN strike on Monday but planning to appeal the decision in federal court.

Other unions could participate in court and support the Teamsters, Boucher said.

“This historical moment is so extremely important that labour needs to get involved and they will,” he said.

The 58-year-old Boucher, who once worked as a CN locomotive engineer, has been bargaining with CN out of a second-floor conference room at a downtown Montreal hotel.

The Teamsters union disagreed with CN and CP over scheduling, shift duration and availability. CN, for example, wants employees to work up to 12-hour shifts, compared with 10 hours in the current agreement, a move opposed by the union.

Boucher said he has been in contact with the union representing more than 5,400 Air Canada pilots who approved a strike mandate last week.

“We’re going to be calling on all labour across Canada to join our fight and take this all the way,” he said.

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The independent labour tribunal made the decision after Canada asked it on Thursday to end an impasse in separate talks between more than 9,000 Teamsters members, and Canadian National Railway and Canadian Pacific Kansas City.

The Teamsters said in a statement that workers’ rights were “significantly diminished” with the ruling and that it would appeal in federal court.

The board’s decisions are the latest twist in the labour disputes at CN and CPKC, which locked out Teamsters members on Thursday, triggering a simultaneous rail stoppage that business groups said could inflict hundreds of millions of dollars in economic damage.

Canadian Labour Minister Steven MacKinnon said on social media site X that he expects “railway companies and employees will resume operations at the earliest opportunity.”

The decision will restart railway operations at CPKC where workers had been both locked out and on strike, by 00:01 ET (0401 GMT) on Monday, the railway said in a statement.

A Teamsters spokesperson said workers would not come back earlier, despite CPKC’s request for employees to return on Sunday.

“We anticipate it will take several weeks for the railway network to fully recover from this work stoppage and a period of time beyond that for supply chains to stabilize,” CPKC said.

The labour board’s decision averted a planned strike on Monday by locomotive engineers, conductors and other workers at Montreal-based CN just days after Canada’s largest railway ended a lockout and began restoring service. The Teamsters confirmed its CN workers would not strike on Monday after the CIRB decision.

Along with ordering an end to the stoppage, the board implemented government requests to impose binding arbitration on the parties to reach new deals and to impose a continuation of the existing contracts until new agreements are reached.

“This decision by the CIRB sets a dangerous precedent,” said Paul Boucher, president of the Teamsters Canada Rail Conference. “It signals to corporate Canada that large companies need only stop their operations for a few hours, inflict short-term economic pain, and the federal government will step in to break a union.”

A CN spokesperson said the company would have preferred a negotiated agreement, but “we are satisfied that this puts an end to the labour stoppage.”

The disruption could have drastically affected farmers and agriculture companies in both Canada and the United States.

Wade Sobkowich, executive director of the Western Grain Elevator Association, which represents grain companies, said they had urged the government for weeks to refer the matter to the CIRB.

“It means that the government has really listened to what Canadians were telling them,” he said. “We can’t take a self-inflicted wound on the economy.”

Mike Steenhoek, executive director of the U.S. Soy Transportation Coalition said the Canadian government had to intervene to help farmers who rely on seamless cross-border trade.

“We have not taken a side between railroads and railroad workers,” Steenhoek said. “However, we are on the side of the American farmer.”

On Thursday, MacKinnon, said his decision to refer the matter to the CIRB would survive a court challenge given his broad power under the country’s labour code.

The Teamsters union wants its members’ working conditions and pay to be determined by bargaining, despite disputes with CN and CP over scheduling, shift duration and availability. CN, for example, wants employees to work up to 12-hour shifts, compared with 10 hours in the current agreement, a move opposed by the union.

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The Teamsters union filed notice that conductors, locomotive engineers and other workers at Montreal-based CN would strike on Monday, just days after returning to work on Friday.

A Canadian government official had no immediate comment.

A CN spokesperson said trains were starting to run and the company’s plan to resume operations was under way.

“We are focused on getting back to work,” said Jonathan Abecassis, CN’s spokesperson. “The Teamsters are focused on getting back to the picket line.”

The looming strike is the latest twist in a labor dispute at Canada’s top two railroads, which locked out more than 9,000 unionized workers on Thursday, triggering a simultaneous rail stoppage that business groups said could inflict hundreds of millions of dollars in economic damage.

A lockout at rival Canadian Pacific Kansas City has yet to be officially lifted after the Canadian government moved on Thursday to end the rail stoppage, which for the first time involved both railways simultaneously.

The dispute led Canada’s Labour Minister Steven MacKinnon to ask the Canada Industrial Relations Board to issue a back-to-work order. Union and railroad officials met with the CIRB, an independent body, on Friday morning, the Teamsters said on social media site X.

Teamsters spokesperson Chris Monette said by phone earlier in the day that the union would challenge the constitutionality of the minister’s referral, without giving details.

Monette said CN workers would return to work on Friday, although the union had not received any back-to-work protocol from the railway.

“The return to work will be chaotic this morning,” he said.

Monette said members from CPKC would not be back at work as the railway had not yet ended its lockout.

CPKC said late on Thursday that it was preparing to restart operations in Canada and that further details on timing would be provided once it received the CIRB’s order.

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Coronavirus, which hit China’s industrial production, along with U.S. tariffs on Chinese goods, are further leading suppliers to eye alternative manufacturing sites in Asia.

“The tariff war and coronavirus have intensified and accelerated these trends,” CN CEO Jean-Jacques Ruest said. “I think, therefore, we are even more bullish today than two years ago.”

He sees a shift in the business mix, combined with container expansion projects planned for ports in Montreal, Quebec City and Halifax — three main eastern Canadian ports — as key to reviving CN’s underutilized eastern network, which lost capacity as manufacturing dwindled.

“CN is very focused to repurpose that network, which is in great shape and only running at 50 per cent capacity,” Ruest said.

CN, which has access to 15 port operations overall, is a partner in a $775 million joint venture for a new container terminal at Quebec City’s port, but has not disclosed its specific investment.

Montreal-based CN is betting on more freight generated by consumer spending being shipped through the Suez Canal to North America’s east coast, even as the pandemic fuels demand for e-commerce.

CN figures show 30 per cent of 2018 revenues were from consumer products, compared with 65 per cent for commodities such as chemicals, grain and fertilizer, that the railway moves on its densely-trafficked line in Western Canada.

But revenues for CN’s consumer franchise grew nearly 28 per cent between 2014 and 2018, around double the rise in the company’s commodity and resource business during those years.

CN figures show overall twenty-foot equivalent units (TEU), a measurement for cargo capacity, are expected to grow by around 70 per cent at the three ports in 2024. Plans for the two Quebec ports, however, still require permits.

CN’s strategy is to connect more cities with the port access through acquisitions, joint ventures, or strategic partners that would help it access markets in the U.S. Midwest and central Canada.

Ruest said what CN needs to fully capitalize on the unused capacity on the mainline between Halifax and Chicago is increased access to highly-populated areas.

CN withdrew its full-year 2020 forecast following the pandemic and expects a tough second quarter for its energy unit.

— Allison Lampert is a Reuters correspondent covering the Canadian transport sector from Montreal.

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Activists disrupted passenger and freight traffic last month to show solidarity with the Wet’suwet’en people, who are seeking to stop TC Energy Corp.’s Coastal GasLink pipeline from being built across their land.

“In the case of CN we lost the equivalent of 10,000 carloads, or roughly one million tonnes,” Ruest said in an interview. “Of all the supply chains the one that will take the longest (to recover) is the grain export.”

The lost capacity represents roughly one per cent of Canada’s total harvest during the 2019-20 marketing year, which runs from Aug. 1, 2019, through July 31, 2020.

Canada relies on CN, the country’s largest railroad, and smaller rival Canadian Pacific Railway to move crops, oil, potash, coal and manufactured goods to ports and the United States.

The blockades, which shut some lines for weeks, hit “every commodity,” creating backlogs of products sitting on CN railcars, along with product that “has yet to enter our network,” he said.

Ruest said CN did not move as much crude by rail as expected in February because of the blockades. He said he believes crude shipments will remain a driver of growth this year for CN, although weaker prices could impact output.

Global crude price benchmarks have tumbled this year by more than one-fifth, due to fears that the coronavirus outbreak could sap global demand.

Earlier Tuesday, CN said over 1,400 trains, including passenger trains, were delayed or canceled because of the blockades, causing shutdowns of parts of the company’s network as freight is parked across the network, ready to be moved.

CN also confirmed a Reuters report from Friday that the company was calling back many of the 450 employees based in Eastern Canada who had been temporarily laid off because of the blockades.

Ruest said he hopes protesters will not target rail amid tensions over other pipeline projects. Along with Coastal GasLink, twinning is under way with the Canadian government-owned Trans Mountain oil pipeline from Alberta to the Pacific coast near Vancouver, which also faces fierce opposition from environmental and some indigenous groups.

“It is a very costly way to resolve issues,” Ruest said. “I surely hope this is not the way of the future.”

— Reporting for Reuters by Allison Lampert in Montreal; additional reporting by Rod Nickel in Winnipeg and Kelsey Johnson and Steve Scherer in Ottawa.

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Earlier this week, police made 10 arrests and cleared a blockade in eastern Ontario that had been stopping freight and passenger traffic for almost three weeks on one of Canada’s busiest lines.

The blockades were held in solidarity with the Wet’suwet’en people in British Columbia, who are seeking to stop TC Energy from building a gas pipeline over their land.

“In the absence of illegal blockades on our network over the last 24 hours, and while we are keeping a close watch for any further disruptions, we have started calling back many of the temporarily laid off employees based in Eastern Canada,” CN CEO Jean-Jacques Ruest said in the email seen by Reuters.

The email did not specify how many of the 450 workers were being called back.

After 21 days of disruptions, “there is a significant backlog of trains parked on our tracks and in our yards that will be processed,” the email said.

“The complete network recovery process will take several weeks.”

Montreal-based CN said the company was on its way to recovering in Western Canada, and said products such as export grain, imported containerized goods, coal, potash and other commodities are moving to market.

Canada relies on CN and rival Canadian Pacific Railway to move crops, oil, potash, coal and manufactured goods to ports and the United States. About half of Canada’s exports move by rail, according to industry data.

— Reporting for Reuters by Allison Lampert in Montreal.

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The Teamsters union argued in court filings that Canadian Pacific Railway should face contempt fines of $50,000 a day for making its conductors and locomotive engineers stay late, despite an arbitrator’s decision that ends duty after their shifts.

The case, which has been filed in Federal Court in Toronto, is expected to go to court in 2020, said sources who spoke on condition of anonymity because the dispute is still wading its way through the legal system. No date has been set.

In an emailed statement to Reuters, Calgary-based CP denied that it failed to comply with the arbitrator’s 2018 order, adding it is “vigorously defending” its claim and believes the case should be resolved outside of court.

Workers’ shifts and fatigue emerged as key issues in November during a crippling, eight-day strike at Canadian National Railway, which ended with an agreement-in-principle set to be finalized in late January.

A recording of an exhausted CN conductor facing pressure to move a freight train following his 10-hour shift helped spur a breakthrough in the negotiations.

Transport Minister Marc Garneau is reviewing rail industry proposals submitted this week to introduce new work-rest rules for railway employees, as part of broader efforts by North American regulators to fight fatigue.

CP said in the emailed statement that the parties are currently “working to resolve a host of procedural issues” in the case.

Mixing arbitration and the courts is a departure from the normal practice of separating the two fields, following a 1995 Supreme Court of Canada decision on the matter, a human resources expert said.

“It would be very uncommon,” said Rafael Gomez, director of the Centre for Industrial Relations and Human Resources at the University of Toronto.

CP argued Federal Court is the wrong forum to hear “complex operational issues” such as the ones in the case.

The Teamsters Canada Rail Conference (TCRC) union and Canada’s large railways have clashed for years over working hours in the 24-hour, mostly on-call industry serving far-flung locations, where delays are common because of bad weather and congestion.

“These issues can and should be dealt with through the processes already provided for under the collective agreement between the parties,” CP said.

The TCRC, which declined comment, argued in the June 2019 filing that CP left it no other choice but to go to court.

“The union has now been forced to seek this contempt motion because the violations continue to occur hundreds of times every month,” said the TCRC, which represents thousands of Canadian rail workers.

The union said it identified 6,215 violations of workers’ rest provisions between the publication of the arbitrator’s order on March 23, 2018, and Dec. 19, 2018.

CP’s unionized locomotive engineers and conductors can book rest within 10 hours if they give proper notice, and can be off duty within 12 hours, barring extenuated circumstances outside the railway’s control, such as bad weather.

Rail workers in Canada and the U.S. can work a maximum of 12 hours, according to regulations in each country.

While arbitrator Graham Clark did not side fully with the union or CP, his March 2018 decision issued a cease and desist order after “CP’s own evidence indicated that thousands of situations continue to occur annually where employees are not off within 10 hours.”

Most of the workers were kept less than an hour late.

“The health and safety of the union’s members (and the public), maximum hours of work and their right to book rest if they are fatigued, is of paramount concern,” the union said in the 2019 filing.

— Reporting for Reuters by Allison Lampert in Montreal and Anna Mehler-Paperny in Toronto; additional reporting by Kelsey Johnson in Ottawa.

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The audio recording, released on Monday by Teamsters Canada, cut to the heart of workers’ demands in the eight-day-old strike, which rippled through the country’s economy from disrupted grain exports to planned layoffs.

While Reuters could not independently verify the recording, its release helped change public perception and acted as a catalyst for a deal reached on Tuesday with Canadian National Railway (CN), Teamsters Canada president François Laporte said.

The recording featured a conductor who wanted approval from government regulator Transport Canada before moving a train after a 10-hour shift.

“We are not refusing duty. You can log that. I have told you on recording that we are unfit for duty. We’re past our 10th hour. We’re up to almost 11 hours,” the conductor says.

The supervisor responds if he does not move the train, he will consider it refusing to do the job and will request an investigation.

“Sir, that’s your call. … If I take this train now and we hit somebody, who is responsible for that now?” the conductor asks.

Teamsters, the union representing 3,200 CN workers, declined to disclose the name of the conductor but said he ultimately did not move the train and was suspended for 14 days without pay.

CN, which said Monday it is aware of the recording, did not offer an immediate comment on Tuesday.

Transport Canada said on Monday it had not received a complaint regarding the recording.

Transport Minister Marc Garneau on Tuesday declined to comment on the recording, but told reporters in Ottawa that efforts are underway by his government to improve fatigue management in the rail sector.

“This is the kind of situation we want to avoid,” Laporte said of the recording. “We have to protect our people.”

The agreement reached with CN, Canada’s largest railroad, will better protect thousands of workers from being reprimanded in cases where they are too tired to safely operate trains, Laporte said in an interview.

“When you repeat that you’re fatigued, you won’t be subject to discipline,” Laporte told Reuters.

The tentative agreement must still be ratified by union members, including conductors and yard workers, with a vote expected in eight weeks, CN said.

— Reporting for Reuters by Allison Lampert in Montreal; additional reporting by Kelsey Johnson in Ottawa.

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“We have a deal,” a CN spokesman said. The union said normal operations will resume on Wednesday morning across Canada. CN shares rose almost two per cent in morning trading.

Some 3,200 striking conductors and yard workers went on strike for eight days demanding improved working conditions, including worker rest breaks, at Canada’s largest railroad.

The longest rail strike in a decade has piled pressure on Prime Minister Justin Trudeau’s new government to intervene. On Monday, farmers facing propane shortages dumped wet corn in front of the prime minister’s local Quebec office and pleaded for the government to step in.

Industry figures show about half of Canada’s exports move by rail, and economists have estimated a prolonged strike could eat into economic growth.

— Reporting for Reuters by Allison Lampert; additional reporting by Kelsey Johnson, writing by Steve Scherer.

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