Businesses and consumers in Canada and the United States were at risk of significant economic damage after Canada's major freight railways were completely shut down Thursday due to a contract dispute with their workers.

Canadian government officials met urgently to discuss the closure. Canadian National and CPKC railways halted employee activities after Thursday's 12:01 a.m. deadline, without a new agreement with the Teamsters Canada Rail Conference, which represents about 10,000 engineers, conductors and dispatchers.

All rail traffic in Canada and all shipping crossing the U.S. border has been halted, although CPKC and CN trains will continue to operate in the United States and Mexico.

Billions of dollars of goods move by rail between Canada and the United States each month, according to the U.S. Department of Transportation. Many businesses across all industries rely on railroads to move their raw materials and finished products. Therefore, without regular rail service, they may have to reduce their operations or even close their doors.

Both railroads have indicated they will end the lockout if the union agrees to binding arbitration, while the unions have indicated they remain at the negotiating table.

Business groups have urged the government to intervene, but Prime Minister Justin Trudeau has refused to force the parties into binding arbitration for fear of offending the Teamsters Canada Rail Conference and other unions.

Canadian Minister of Public Services and Procurement Jean-Yves Duclos urged both sides to resolve their differences.

“They have to do their job to reach an agreement quickly,” he told a news conference.

Canadian Labor Minister Steven MacKinnon had scheduled meetings “throughout the day on this extremely important issue,” according to a statement from his office.

Business leaders were furious at the lack of government intervention.

Negotiations are deadlocked over issues related to railroad workers' work schedules and rules designed to prevent fatigue and ensure adequate rest for train crews. Both railroads had proposed abandoning the existing system, which pays workers based on distances traveled, to adopt an hourly system that they said would make it easier to provide predictable time off.

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Funk was reported from Omaha, Nebraska.