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Labour Minister Lisa Raitt speaks at a news conference on Parliament Hill Wednesday, May 23, 2012 to respond to the ongoing labour dispute at Canadian Pacific Railway. (Fred Chartrand/THE CANADIAN PRESS/Fred Chartrand/THE CANADIAN PRESS)
Labour Minister Lisa Raitt speaks at a news conference on Parliament Hill Wednesday, May 23, 2012 to respond to the ongoing labour dispute at Canadian Pacific Railway. (Fred Chartrand/THE CANADIAN PRESS/Fred Chartrand/THE CANADIAN PRESS)

Let talks roll in CP rail dispute Add to ...

Lisa Raitt, the federal Minister of Labour, is right to refrain – so far – from intervention in the strike of the unionized workers of Canadian Pacific Railway Ltd. The company and the union, the Teamsters Canada Rail Conference, should have a reasonable opportunity to negotiate a settlement on their own terms.

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But Ms. Raitt’s warning that the government could table legislation as early as Monday (at the moment the House is adjourned until then) is not altogether encouraging. She was too prompt to intervene in labour disputes at Air Canada and Canada Post – matters in which less vital economic interests were at stake.

Eventually, however, it may be necessary to intervene, railway transport being a systemic element in the Canadian economy – both for natural resources and manufacturing. Indeed the shortage of pipeline capacity is making more railways even more valuable.

But CP is by no means the only railway in Canada; Canadian National Railway Co. is larger. Still, it is not possible for companies just to switch their cargo smoothly and seamlessly from one railway to another.

The central issue between the CPR and the union is that management wants to place new employees in defined-contribution pensions plans, which are now standard in the private sector, whereas established employees are in defined-benefit plans, in which the employees do not the share the risks with the company. The Canadian public sector is severely burdened by defined-benefit plans with unrealistic rates of return. In the current economy, with abnormally low interest rates, defined benefits are often not achievable, and threaten some firms with insolvency.

But the companies and its employees have a better knowledge, and a better feel, for their own interests and their own comparative strengths than the federal government can have. The imposition of binding arbitration would be little better than an imposed government settlement. Ms. Raitt and her colleagues should show deference to management-union negotiations.

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