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A view of the Canadian National (CN) Thornton Railroad Yards in Surrey, B.C., in this June 21, 2012 file photo.ANDY CLARK/Reuters

Amid a stalemate in contract talks, the union that represents 4,800 workers at Canadian National Railway Co. is warning of a strike at Canada's largest rail company.

Jerry Dias, head of Unifor, said the union will begin holding a strike vote on Thursday, a three-week process he predicts will give negotiators the mandate to threaten a work stoppage as they bargain with Montreal-based CN for a deal they say matches the one reached on Saturday with Canadian Pacific Railway Co.

"Based on how things are going right now, we're going to have a strike with CN," Mr. Dias said by phone.

CN said the union that includes mechanics and office workers has rejected a "fair" offer that is in line with agreements reached with other employees. The company says it has offered to send the dispute to arbitration, but that a hurdle to any deal is the union's demand the company contribute money to what CN calls a "political and community action fund" whose purpose is to propagate a "union agenda."

"This is an issue of principle for us," Claude Mongeau, CN's chief executive officer, said in a statement. "CN is prepared to co-invest in charitable causes, but we are not prepared to support such a union agenda."

Mr. Dias descibes the union fund as "philanthropic," and says it recently contributed $230,000 to food banks and women's shelters. CP supported the fund in the talks that resulted in a tentative agreement on Saturday, Mr. Dias said, adding CN was asked to contribute 5 cents for every hour worked by Unifor members. Mr. Dias said the company's objections to the fund are intended to obscure the fact it does not want to match the pay increases CP employees received.

"The issue is about $5 an hour in pay increases over four years, it's not about a nickel," Mr. Dias said. "CP made $1.5-billion last year in profit. CN made $3.2-billion last year. So if CP can pay the wages then so can CN."

In a sign the company is also willing to play hardball, CN says it will alter the terms of the collective agreement by imposing a 2-per-cent wage increase, less than the 3-per-cent raise that was on the table. "While CN has signed agreements with higher wage patterns, those were reached before the economy started softening and reflected the value to CN of deals reached amicably, without the threat of disruption or potential strike action," the company said. Other changes imposed include longer probationary periods for new hires and expanding the duties of mechanics.

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Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 28/03/24 4:00pm EDT.

SymbolName% changeLast
CNI-N
Canadian National Railway
+0.05%131.71
CNR-T
Canadian National Railway Co.
-0.15%178.37
CP-N
Canadian Pacific Kansas City Ltd
-0.33%88.17
CP-T
Canadian Pacific Kansas City Ltd
-0.54%119.43

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