CN Rail and Via Rail are shutting down huge sections of their railway networks as Indigenous blockades continue to cripple the country's transportation systems.

Via Rail is temporarily ending most passenger services nationwide, expanding an earlier work stoppage that restricted train cancellations to the Toronto-Ottawa-Montreal corridor.

"Via Rail has no other option but to cancel all of its services on the network, with the exception of Sudbury-White River (CP Rail) and Churchill-The Pas (Hudson Bay Railway), until further notice," the rail operator said in a media statement.

The company said it would automatically process full refunds for all cancelled trips.

"You do not need to contact Via Rail to confirm the refund, but note that due to the volume of transactions it may take up to 15 days to receive," the Crown corporation said. "We understand the impact this unfortunate situation has on our passengers and regret the significant inconvenience this is causing to their travel."

Via Rail has temporarily suspended all trains nationwide because of ongoing Indigenous protests. (Adrian Wyld/The Canadian Press)

CN Rail, the country's largest railway, is "initiating a progressive and orderly shutdown of its Eastern Canadian network" because Tyendinaga Mohawk protesters near Belleville, Ont. have so far refused to dismantle their blockade.

The railway operator said the shutdown, which will affect the entire network east of Toronto, may result in temporary layoffs of CN workers. Teamsters Canada, the union which represents over 16,000 workers in the rail industry, said Friday the shutdown could lead to roughly 6,000 layoffs.

Via Rail trains run on CN tracks in most parts of the country, a vestige of a time when CN ran its own passenger trains.

'The situation is regrettable'

"With over 400 trains cancelled during the last week and new protests that emerged at strategic locations on our mainline, we have decided that a progressive shutdown of our Eastern Canadian operations is the responsible approach to take for the safety of our employees and the protestors," J.J. Ruest, the president and CEO of CN, said in a media statement.

"This situation is regrettable ... these protests are unrelated to CN's activities and beyond our control. Our shutdown will be progressive and methodical to ensure that we are well set up for recovery, which will come when the illegal blockades end completely."

Last weekend, CN Rail obtained a court injunction to end the illegal Mohawk demonstration. The injunction has been ignored by the protesters. Activists also ignored a request from the on-reserve Tyendinaga Police for them to voluntarily dismantle the blockade.

History and internal politics play a role in the internal division over the Coastal GasLink pipeline among the Wet'suwet'en people. 2:08

The injunction forbids any continued interference with the rail line under the threat of arrest. The Ontario Provincial Police has not yet enforced the injunction.

The federal government, which has jurisdictional authority over railways, has so far refused to intervene. Indigenous Services Minister Marc Miller has agreed to meet with the Mohawks on Saturday.

Transport Minister Marc Garneau said he plans to meet with his provincial and territorial counterparts Friday, adding he is in contact with CN and CP.

In a statement Thursday, Garneau said "freedom of expression" is an important democratic right, but added, "these activities must respect the court decisions and the law."

The Mohawk activists have said they won't end their demonstration until the RCMP leaves the traditional territory of the Wet'suwet'en in northern B.C. Wet'suwet'en hereditary leaders had been blocking road access to a construction site for the Coastal GasLink pipeline, a key part of a $40-billion LNG Canada liquefied natural gas export project.

While much of the police action near that road ended Tuesday with multiple arrests, the RCMP still has officers stationed near the pipeline construction site.

Train tracks have been blocked near New Hazelton, B.C. since Saturday afternoon. (Photo by Lillian Granley)

A separate rail blockade on CN tracks near New Hazelton, B.C. was set to end today after Gitxsan hereditary chiefs agreed to end protests designed to show solidarity with the Wet'suwet'en.

Crown-Indigenous Relations Minister Carolyn Bennett and her provincial counterpart will hold talks with both the Gitxsan and the Wet'suwet'en hereditary chiefs in the coming days.

A prolonged shutdown could have devastating consequences for the country's economy. CN moves more than $250 billion a year in goods across its transcontinental network.

The shutdown threatens the transport of food and consumer items, grain, de-icing fluid for airports, construction materials, propane supplies for Quebec and Atlantic Canada, and natural resources like lumber, aluminum and coal, the railway said.

The Canadian Chamber of Commerce urged the federal and provincial governments and the police to immediately end the transport chaos and help CN restore rail service.

"From propane to grain and food and consumer items, Canada's supply chains are being severely damaged by the continuing interruptions to Canada's rail services by protestors," the organization said in a statement.

"The rail system affects the entire Canadian economy and Canadians everywhere, including people trying to get to and from work. They must be allowed to continue to serve the thousands of businesses that depend on them."

'What happened to the rule of law?'

Bob Masterson, president and CEO of the Chemistry Industry Association of Canada, said this shutdown could be hugely problematic.

"It's a critical situation. It's an extremely dire situation for the economy and, in the coming days, for communities across the country," he told CBC's Power & Politics.

On Feb. 13, CN Rail announced it was closing its rail network in Eastern Canada and VIA Rail announced closures for much of its passenger service across the country as protests and blockades on some First Nations continued. (CBC News)

He said 80 per cent of his industry's products, such as jet fuel for planes and chlorine for drinking water, are shipped by rail.

Masterson said the provincial police need to enforce the court-ordered injunction and clear out the Mohawk protesters.

"Everyone has the right to protest ... but the courts have said, 'You've gone too far, it's no longer in the public interest,'" he said. "The actions are illegal, this is trespassing. What happened to the rule of law in Canada?"