Canada seeks peaceful end to rail blockade as pressure builds

OTTAWA (Reuters) - Canada is seeking a peaceful end to a rail blockade that has shut down freight and passenger traffic, Prime Minister Justin Trudeau said on Tuesday, amid increasing pressure from business leaders and the Conservative opposition to clear the tracks.

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For almost two weeks, protesters across the country have taken up the cause of the Wet’suwet’en indigenous people of western British Columbia in their campaign against the C$6.6 billion ($4.98 billion) Coastal GasLink project.

In Ontario, Tyendinaga Mohawk protesters have stopped service along a major eastern Canada rail line.

“I know that people’s patience is running short. We need to find a solution and we need to find it now,” Trudeau told legislators in parliament. The dispute should be settled by “dialogue and mutual respect” and not through force, he added.

Canadian National Railway Co (CN) has obtained a court injunction to end the blockade in Ontario, but police have so far refrained from using force to uphold it.

CN said on Tuesday it was temporarily laying off about 450 people and progressively shutting down operations in eastern Canada due to the blockade.

Police in British Columbia did clear out protesters, turning the situation into a flashpoint for indigenous demonstrators. The standoff is testing Trudeau’s pledge to repair Ottawa’s relations with First Nations and champion their causes.

The disruption comes as other major energy projects that will affect indigenous peoples hang in the balance, including the construction of the Trans Mountain pipeline and the decision on whether to approve Teck Resources Ltd’s Frontier oil sands project.

Andrew Scheer, leader of the official opposition Conservative Party, said Trudeau’s response to a national crisis has been weak.

“No one has the right to hold our economy hostage,” Scheer said.

The rail stoppage has led to a shortage of propane and other goods, and on Tuesday farmers warned they have not been able to get their products to ports.

“Interruptions in rail service amplifies the stress that farmers and rural communities are under, creating a huge amount of uncertainty in their day-to-day lives,” said Mary Robinson, the president of the Canadian Federation of Agriculture.

“We see the blockade does have real economic impacts,” Finance Minister Bill Morneau said, without quantifying the damage.

More than 30 chiefs of Canadian business associations on Tuesday urged Trudeau to negotiate an immediate end to the blockades, according to a joint letter sent to the prime minister.

Reporting by Steve Scherer and David Ljunggren in Ottawa and Rachit Vats in Bengaluru; Editing by Lisa Shumaker and Matthew Lewis