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A Canadian Pacific Railway crew works on their train at the CP Rail yards in Calgary.TODD KOROL/Reuters

Canadian Pacific Railway Ltd. says it has begun shutting down its domestic rail network and told shippers it will not handle any Canadian goods as of early Saturday morning, ahead of a possible weekend strike by two of its unionized work forces.

The move precedes a possible Friday night walkout by 3,000 CP locomotive engineers and conductors represented by Teamsters Canada Rail Conference that could halt much of the country’s rail freight. And a strike by more than 360 track signal workers in the International Brotherhood of Electrical Workers risks shutting down parts of commuter railways serving Vancouver, Toronto and Montreal.

“CP has commenced and will continue to execute a safe and structured shutdown of its train operations in Canada,” CP said in a notice to customers posted on its website. “The embargo can be rescinded at any time.”

“So that’s that,” said Bob Masterson, chief executive officer of the Chemistry Industry Association of Canada, which represents 50 companies that make chemicals and resins. “The impacts have already started because companies will have to take that into account.”

Calgary-based CP and both unions have been in talks since the fall, but both unions said they are set to strike at midnight on Friday night if talks fail to produce a collective agreement they believe members will support.

“We’re ready to bargain up till whenever,” Doug Finnson, Teamsters president, said by phone. He was unaware of CP’s customer notice. Christopher Monette, a Teamsters spokesman, said the company had not provided any information about the notice and could not say whether members had been informed. “It’s new information to us,” he said.

A CP spokesman declined to elaborate on the notice to customers or provide details on the shutdown procedures.

Keith Creel, CP chief executive officer, said on a conference call with analysts on Wednesday that the company is seeking a “fair” deal, but was willing to endure “short-term pain” to reach labour contracts that will fend off “long-term damage.”

Mr. Masterson said many chemical plants have already begun shutting down because they have no space to store products, and run a just-in-time production schedule. His members ship about $20-million worth of resins and other chemicals on CP, and many have no access to Canadian National Railway Ltd. A closed factory loses about $1-million every day, he said.

“The impacts are already happening,” Mr. Masterson said.

The Grain Growers of Canada and other industry groups are urging the federal government to ready legislation or appoint arbitrators to eliminate the possibility of a rail stoppage.

“A large amount of grain is still sitting on farms waiting to move,” said Jeff Nielsen, president of Grain Growers of Canada.

“The impacts will be quite wide,” said Bob Ballantyne, head of the Freight Management Association of Canada, which represents large food makers, retailers, miners and other businesses that rely on rail to move goods and raw materials.

Mr. Ballantyne said factories and other CP customers are trying to prepare for a strike by trying to arrange shipments with CP’s rival CN Rail and truckers. “Shippers can’t wait. When there’s even the threat of a strike, they have to take actions to protect themselves,” he said, adding, “Neither CN nor the trucking industry would be able to pick up the slack.”

Metrolinx, which operates GO Transit trains on some CP lines in Greater Toronto and Hamilton, on Thursday was talking with CP to determine the level of service that non-union employees would provide in a work stoppage. Passengers on the Milton and Barrie lines could face delays if there are problems with switches or signals maintained by IBEW workers, Metrolinx said.

“We can’t safely run trains on a corridor that’s not being maintained,” said Anne Marie Aikins, a spokeswoman for Metrolinx.

About 5,000 weekday users of B.C’s West Coast Express, which serves Vancouver and the Lower Mainland and runs on leased CP tracks, could be affected by the walkout. Chris Bryan, a spokesman for TransLink, the service’s operator, said CP has said “qualified managers” would replace striking signal workers. Meanwhile, TransLink is arranging to replace the trains with buses that would carry passengers to the nearest SkyTrain station.

“It’s not an ideal situation and it wouldn’t be as fast as the direct commuter rail, but we want to ensure we keep our customers moving,” Mr. Bryan said by phone.

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