Government to intervene as CP strike threatens economy

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A strike by locomotive engineers and conductors at Canadian Pacific Railway Ltd. is expected to be felt by everyone from Prairie grain farmers to commuters in downtown Montreal.

The government will introduce back-to-work legislation when Parliament resumes sitting on Monday, and federal Labour Minister Kellie Leitch has told both sides she will send the dispute to binding arbitration.

More than 3,000 workers represented by the Teamsters union went on strike after late-night talks on Saturday failed to overcome such key issues as scheduled work and rest times. The union says it is pushing back against an employer that is driving its workers too hard; the company says it is trying to modernize an antiquated business by implementing a work schedule to meet customer demands.

But until legislation ending the strike is approved – a process that could take several days – those customers will be left with freight sitting on the loading dock, or idled production lines in wait of raw materials.

CP has said it is unable to run most trains without the Teamsters, but some freight will be hauled by non-union staff. The trucking industry, meanwhile, is facing a shortage of drivers and does not have enough trucks to fill the void left by CP.

"This has the potential of being very very bad," said Wade Sobkowich, executive director of the Western Grain Elevator Association.

The association represents the big grain companies, including Richardson International and Cargill Inc. "We have to honour our contracts with our farmers. We have to honour our contracts with our international customers," Mr. Sobkowich said. He added that grain companies will face financial penalties for unfilled orders and fees from shipowners left waiting at port for grain. Farmers, meanwhile, will be paid lower prices for their crops as grain traders with little elevator space cut their offers, he said.

The group of grain traders backs government plans to legislate an end to the strike, and has asked it to take the step of declaring grain shipping an essential service that cannot be halted in labour disputes.

David Bradley, president of the Ontario Trucking Association, said there are not enough trucks or drivers to pick up the freight not handled by the railway. He said railways are geared to carrying bulk commodities such as coal over long distances, whereas the trucking industry specializes in much smaller, higher-value cargo that serves a more diverse – and shorter – network.

For passengers who use the rails, Via trains could be delayed in Northern Ontario between Sudbury and White River, where the government-owned passenger service runs on CP track.

Meanwhile, Montreal's commuter train service, Agence métropolitaine de transport, will see three of its six lines shut, and 19,000 passengers will need to find another way to get to the office on Monday. CP owns the Candiac, Vaudreuil-Hudson and Saint-Jérôme lines, and the trains are run by 60 of its engineers and conductors, who are on strike.

Calgary-based CP and the crews that run the trains have been in talks over a new collective agreement since the fall.

Peter Edwards, CP's chief negotiator and vice-president of labour relations, described the mood at the talks held in a downtown Montreal hotel as "civil yet intense," but said he believed many months ago that negotiations would fail.

The company's offer included higher benefits, raises of 3 per cent a year and a promise no one would lose their jobs, Mr. Edwards said. The company also wants to be able to plan when workers start their shifts and take breaks, a function Mr. Edwards said is needed in an industry that runs on schedules.

Teamsters president Doug Finnson called company demands "severe."

"The final package of concessions amounted to much the same thing as the hourly agreement this same management team tried to impose on our brothers and sisters at Canadian National [Railway] in 2007. Those tactics resulted in a national rail strike at CN then, and unfortunately have done so again today at CP," he said in a statement.

Mr. Edwards, who worked at CN in 2007 when it was run by CP's current CEO Hunter Harrison, said the company's proposal did not include a switch to hourly wages, but agreed the companies had things in common.

"The similarities between the two are change. You've got two railways that had been hidebound by over 100 years of tradition that comes from the steam age … so trying to change that is very difficult. And that's why we offered the age protection and the job protection. No one is going to get hurt out of it. This all about looking after people going forward, in fact everybody gets a raise. But to get people to think in a new way is pretty difficult."

Both sides say they are willing to return to the bargaining table, but it is unlikely that will happen before the government imposes arbitration.

It could take a week or more for the government to end the strike. Monday is a holiday in some provinces, but Parliament is sitting and could begin the process of introducing legislation.

Critics say the speed with which the Conservative government acts to end strikes is an affront to the collective bargaining process and discourages either side from negotiating, knowing the dispute will be sent to mandatory arbitration and unionized employees forced to return to work.

In 2012, 4,800 CP engineers, conductors and yard workers walked off the job for nine days before being the government ended the strike and sent the contract to arbitration.

The federal government ended the 2007 strike at CN with legislation, and was prepared do the same in 2009, but that CN dispute was settled before the law passed. In recent years, Ottawa has blocked strikes twice at Air Canada and sent disputes to the Canada Industrial Relations Board.

Meanwhile, CP on Saturday reached a new agreement with Unifor and its 1,200 workers who inspect and repair rail cars. At Canadian National Railway Ltd., the Teamsters reached a tentative collective agreement covering 1,800 locomotive engineers, but talks continue with Unifor for a contract for 4,800 employees in a range of jobs.