One of Canada’s largest railways is winding down operations after failing to reach a labor deal with unionized workers.

Canadian Pacific Railway Ltd. entered a work stoppage early Sunday after the company and the union’s leadership were unable to negotiate a settlement or agree to binding arbitration, Canada’s Labor Minister Seamus O’Regan said in a statement posted to Twitter shortly after midnight.

Update: The work stoppage has begun, but CP and Teamsters are still at the table with federal mediators. Parties are working through the night. We are monitoring the situation closely and expect the parties to keep working until they reach an agreement.

— Seamus O'Regan Jr (@SeamusORegan) March 20, 2022

“The work stoppage has begun, but CP and Teamsters are still at the table with federal mediators,” O’Regan said. “Parties are working through the night. We are monitoring the situation closely and expect the parties to keep working until they reach an agreement.”

The stoppage means CP can’t operate the railway and will create a “freight capacity crisis,” the railway said earlier this month in a note to its customers.

The disruptions threaten to further roil supply chains and exacerbate volatility in fertilizer markets at a time when farmers are already having trouble getting key nutrients for crops for spring plantings. Crop-nutrient prices have skyrocketed, fueled by a global shortfall and worries that potential sanctions on Russia could disrupt global trade. Canada, along with Russia and Belarus, is a major supplier of the world’s potash, a mined material used in fertilizers. 

CP is the primary rail transportation provider for the delivery of Saskatchewan potash to overseas markets, according to the provincial government.

About 3,000 of CP’s locomotive engineers and conductors voted earlier in the month in favor of going on strike if a collective bargaining agreement isn’t reached. The union is pushing for improved wages, benefits and pensions, and has said it’s willing to remain at the bargaining table beyond the March 20 lockout deadline. 

The lockout move comes after Nutrien Ltd., one of the top crop-nutrient suppliers, and Saskatchewan’s government asked Canada’s federal government to act swiftly to stop a strike. Nutrien’s interim Chief Executive Officer Ken Seitz expressed frustration in an interview Thursday. The company also said it’s hopeful that the situation will be resolved quickly to avoid further price hikes in fertilizer, which has touched record highs multiple times this year. 

Update: The work stoppage has begun, but CP and Teamsters are still at the table with federal mediators. Parties are working through the night. We are monitoring the situation closely and expect the parties to keep working until they reach an agreement.

— Seamus O'Regan Jr (@SeamusORegan) March 20, 2022

The leaders of Canada’s three prairie provinces also called on Prime Minister Justin Trudeau Friday to ensure CP resumes service “as quickly as possible” in the event of delayed rail service. 

“After a never-ending pandemic, exploding commodity prices and the war in Ukraine, this lockout adds an unnecessary layer of insecurity for many Canadians,” Teamsters Canada Rail Conference President Lyndon Isaak said Friday in a statement. “CP’s irresponsibility with regards to the continuity of Canada’s supply chain should be taken to task.”