OTTAWA, Ont. — The CN rail strike is leading to significant economic impact across Canada’s chemical industry, according to the head of the Canadian Chemical Producers Association (CCPA).

Chemical production in Canada is a $29 billion business and the countrys third largest exporter.

“A continued strike by CN workers will have a devastating effect on the industry”, said Larry MacDonald, chairman of CCPA and CFO of NOVA Chemicals. “At a time when the manufacturing industry is hurting, we are seeing a dramatic impact on producers, customers, employees, consumers and communities that can be prevented by the government.”

About 2,800 CN workers represented by the United Transportation Union (UTU) went on strike beginning Feb. 10. CN is attempting to have the strike declared illegal due to what CN claims as insufficient notice and improper authorization from the unions general chairman.

The Canada Industrial Relations Board (CIRB) will continue on Feb. 19 its hearing on CNs application for a declaration that the UTUs strike is illegal.

CN has also reported, the UTU general chairmen refused a comprehensive company offer to resume collective bargaining on Feb. 19 and for the immediate return to work by striking conductors and yard-service employees.

CN continues to offer freight service across its network in Canada with management personnel filling striking workers jobs. CNs other unionized employees remain on the job in Canada and the United States.

But the CCPA has stated that the strike has caused manufacturers to re-route service.

“We have to cut back on production because we are not receiving our raw materials by rail. We have to use trucks to replace trains for the shipping of chemical products,” said Larry Masaro, director of operations for National Silicates. “We expect our incremental shipping costs will exceed $200,000 per week just to start, not to mention lost production costs and the long term impact on customers.”

Many companies have slowed down production, as they have no means to ship products to their customers. The strike is expected to cause serious hardship to small and medium sized companies and their employees, as they reduce output and incur additional costs related to transportation, noted the association.

“This strike is already having a severe impact on our ability to ship products, which is affecting our customers across the value chain,” said Jeff Johnston, president of Dow Canada.

CCPA has written to the federal Labour Minister to request government intervention to restore full service by CN, while the labour dispute is being resolved.