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Lyndon Isaak, president of the Teamsters Canada Rail Conference, confirmed that layoffs are underway. Though he did not know the total number of jobs that would be lost, he expects just a small percentage of his membership to be affected.

“As I understand it, the bulk of the layoffs will be at headquarters in Montreal,” he said.

The job cuts are unrelated to ongoing contract negotiations, Isaak added.

“This has to do with the ebb and flow of rail traffic,” he said. “It’s just the way the business goes.”

The job losses come several weeks after CN said it expects to ship less freight this year than it did in 2018 due to “deterioration” in rail demand. The railway still reported increased revenue and a $1.12-billion profit in the third quarter.

The decline in volume is despite the promise of filling railways with crude shipments, a growing market as the Canadian oil industry tries to move its product in the absence of new pipeline infrastructure. CN reported a higher volume of crude shipments in the third quarter, yet posted a drop in shipments of metals and minerals, grain, potash and forestry products.

Analysts are optimistic that crude-by-rail volumes will increase once the Alberta government sorts out problems with its contracts, which it is trying to transfer to private players.

Canada’s second-largest railroad, Canadian Pacific Railway Ltd., also cut its guidance in October, laying the blame on “softer volumes, macroeconomic challenges and geopolitical tensions.” CP noted particular challenges with potash trade with China and India.

CN’s layoff plans coincide with collective bargaining with the union Teamsters Canada. About 3,000 conductors, trainpersons and yardpersons voted in favour of strike action last month. Talks resumed this week.

With files from Naomi Powell

Financial Post

ejackson@postmedia