Canadian Pacific Railway Ltd. and Teamsters Canada have reached a new five-year labour agreement covering 2,600 workers.
The union says the tentative deal includes 3 per cent annual wage increases, a curtailing of outsourcing and increased benefits.
The employees covered by the new contract maintain, repair and build tracks, bridges and other structures for the railway.
A ratification vote is expected in January.
The deal follows an announcement by the railway last week that it will look to cut about 4,500 jobs as part of a plan to drive down costs.
The move is part of an overhaul at the railway by CP chief executive Hunter Harrison, who took over earlier this year after bitter proxy fight.