Labour Minister Lisa Raitt said Wednesday the federal government stands ready to introduce back-to-work legislation if striking employees and the Canadian Pacific Railway can't reach a deal.
About 4,800 unionized Canadian Pacific workers, including engineers, conductors and yardmen, went on strike early Wednesday after negotiators were unable to reach a contract agreement by the midnight deadline.
As a result, freight service ground to a halt across the country, meaning shipments of grain, fertilizer, coal and other goods were left stranded.
The strike has also forced the company to temporarily lay off 2,000 other workers, whose services aren't needed during the stoppage. They could be joined at any time by another 1,400 workers, company spokesperson Ed Greenberg said Wednesday afternoon.
Speaking in Ottawa on Wednesday, Raitt said the government was putting the parties on notice that it was ready to act soon in order to protect the Canadian economy, which she said could experience financial losses of $540 million per week due to the strike.
"We believe that there is going to be an effect on the economy, and it will occur greater and greater every day as this strike continues," Raitt told CTV's Power Play. "And there will be a point in time when we have to act in the public interest. And we're ready to do that."
Members of Parliament are on break until next week, and Raitt would likely have to recall Parliament for an emergency session if she wanted to bring in legislation before their scheduled return on Monday.
Raitt has not indicated she would make such a move. She said Wednesday the government wants both parties to keep negotiating.
"There is a lot of opportunity for the parties between now and Monday to conclude their own deal," she told Power Play.
Raitt told reporters earlier that she was with both sides until 1 a.m. Wednesday.
Representatives from the union and management negotiated right up until the deadline, and the union said it planned to return to the bargaining table Wednesday.
"We have made every reasonable effort to get a settlement," said Doug Finnson, vice-president of Teamsters Canada Rail Conference (TCRC) in a news release.
"Every union member knows how important the outstanding issues are. We will not walk away from the negotiation table."
Finnson also thanked Raitt for her work trying to help the two sides avoid a strike, and helping broker an agreement between the two sides to keep Via Rail trains travelling on CP lines.
Speaking earlier Wednesday, Greenberg also said Raitt played a key role.
"Discussions are continuing and let's hope we can keep that momentum going that began with that Via Rail agreement with the union thanks to the help of the minister bringing us to the table," Greenberg told CTV News Channel.
The opposition decried the government's move to have back-to-work legislation at the ready. NDP labour critic Alexandre Boulerice called it an "attack against the rights of workers to associate and to freely negotiate."
He also said it takes the pressure off CP during negotiations.
Ahead of the labour disruption Wednesday, both sides said commuter trains in Montreal, Vancouver and Toronto that use CP rail lines would continue to shuttle passengers to work and back, regardless of the strike.
However, a Via Rail route between Sudbury and White River, and the section of the Toronto-to-Ottawa route between Brockville and Ottawa are affected. Via said it is moving passengers by an alternate form of transportation along those routes.
In a statement issued May 19, CP said it would implement a "safe and structured shut down of its train operations in Canada" in the event of a strike.
The statement from Executive Vice President and Chief Operations Officer Mike Franczak said the company believed it had offered a fair and reasonable offer but was willing to enter into binding arbitration or an extension of negotiations if a deal could not be reached.
"This would ensure the continued operations of freight and commuter trains on CP's Canadian network for the benefit of our customers, communities we serve and the economy at large. Any extension to the bargaining process requires consent of the union or action of the federal government," the statement said.
At odds over pensions, benefits
Canadian Pacific is seeking changes to its legacy pension plan and retirement benefits model, saying the changes are necessary for the railway to remain competitive.
CP said it has offered a pension plan that is a "multiple" of the average industrial pension in Canada and exceeds an agreement the teamsters reached "at another major Canadian railway."
"The offer on pension aligns with the industry and allows the railway to remain competitive as we invest in strategic infrastructure upgrades along our network," said Franczak.
In total, the Teamsters Union represents 125,000 members in Canada across all trades.
The government has taken a hardline stance on other recent labour disputes that had the potential to interrupt the flow of goods or commerce.
Raitt stepped in on several occasions to prevent unionized pilots and airline workers from walking off the job, and intervened in a Canada Post strike as well, saying in both cases that a strike would inconvenience Canadians and hurt the economy.
Mark Nantais, president of the Canadian Vehicle Manufacturers Association, said a rail disruption affects auto manufacturers "in a matter of hours," and puts plants in danger of running out of parts within a couple of days.
Nantais said auto manufacturers expect delivery of parts, move parts across the country and into the United States, and ship the cars and trucks that end up in showrooms by rail.
Nantais told Power Play that a plant shutdown costs as much as $1.5 million per hour, not including the hundreds of thousands of dollars to secure alternative modes of transportation.
"These are costs which, even though we're in a positive recovery in the auto industry, these are costs that ultimately are things we cannot afford in this very fragile rebound," he said.
The Canadian Mining Association issued a statement Wednesday asking the government to intervene, saying its member companies also rely on rail to transport equipment, as well as their products.
"A strike by CP workers will have a serious effect on the industry," association head Pierre Gratton said in a statement.
"The shipment of fuel and other supplies to mine sites will be compromised as is the transport of mineral products."
Farmers who rely on regular shipments of fertilizer and other goods will also be hit hard by the strike.
"Anything that interrupts nutrient movement to the grower in the middle of the season in Western Canada is not good news for the farmer," said Richard Downey, a spokesperson for fertilizer producer Agrium Inc.
Agrium, Potash Corp. and Mosaic Co. market their potash together overseas under a joint company called Canpotex. The company ships its products along CP tracks from the Prairies to Vancouver for overseas export.
Downey said the strike could compromise its reliable reputation with its customers.
With files from The Canadian Press
