Contract talks are headed for conciliation at Canadian Pacific Railway Ltd. amid an impasse over pension reform for unionized workers.
“We have a number of proposed options for pension plan modifications, some of which align with the industry, all of which are fair to employees, and none of which have any impact on existing pensioners,” CP chief executive officer Fred Green said in a statement Friday.
The Teamsters Canada Rail Conference’s five-year collective agreement with CP expired on Dec. 31, 2011. The union – which represents 4,800 conductors, engineers and rail traffic controllers – warned last November that Calgary-based CP is proposing cost-cutting changes in retirement plans for employees.
“These are difficult and complex issues for both parties. CP believes that expert, third-party support, with a focused timetable, will offer the best opportunity to achieve a settlement,” Mr. Green said, noting that CP has asked federal Labour Minister Lisa Raitt to appoint a conciliator.
The conciliation process could last from 80 to 90 days.
“CP is seeking to achieve changes to legacy pension and post-retirement benefits to make them industry-comparable. CP has contributed $1.9-billion of solvency deficit contributions to its pension plan over the past three years,” CP said. “Among the range of proposed amendments, some of the options provide guaranteed pension payment that is a multiple of average Canadian industrial pension payment and is comparable to what this union has already agreed to for the majority of its members at another major Canadian railway.”
Canada’s second-largest railway has been under pressure to improve its operations, with U.S. hedge fund Pershing Square Capital Management LP criticizing CP for being an industry laggard.