OTTAWA—Canada’s economy is facing a blow from two weeks of protests that have blocked multiple railway lines, stranding shipments and snarling supply chains in key commercial corridors.

In the latest fallout from the blockades, the country’s largest passenger-rail operator Wednesday issued temporary layoff notices for 1,000 workers, a day after Canadian National Railway Co. said it would temporarily lay off 450 workers of its own. Factories in central Canada could be next in sending workers home, said the head of a national...