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CP Rail talks to resume in Calgary after unions reject railway offer

Last Updated May 27, 2018 at 11:20 am EDT

A Canadian Pacific Railway boards a locomotive in a marshalling yard in Calgary, Wednesday, May 16, 2012. THE CANADIAN PRESS/Jeff McIntosh

Canadian Pacific Railway Ltd. is set to resume talks with its train operators and signalling workers after they overwhelmingly rejected the company’s contract offer, leaving its already disgruntled customers fearing a labour disruption that could further affect their businesses.

About 3,000 members of the Teamsters Canada Rail Conference voted 98.1 per cent against the company’s final offer Friday. The International Brotherhood of Electrical Workers, which represents 365 signal and communications workers, voted about 97 per cent against the offer.

The results comes after the government intervened last month to force union members to vote on the company’s offer just before a strike deadline, ending mediated talks between the railway and two unions.

The unions said they will work with federal mediators, but are prepared to exercise their right to strike if talks fail or the company does not wish to bargain. They could issue a 72-hour strike notice at any time

The results come after union negotiators recommended that members reject the officer.

“CP’s actions have forced us to vote for strike action three times in the past six years. Today, our members have again expressed their anger and frustration with CP,” Doug Finnison, president of the Teamsters Rail Conference, said in a news release.

“It’s now up to CP to listen and show they respect workers by changing their confrontational relationship with their employees, our members.”

Talks were set to resume Friday afternoon in Calgary in an attempt to achieve an agreement and avoid a work stoppage. CP Rail train crews have engaged in two strikes in the past few years. In 2015, they ended a brief walkout and agreed to arbitration after the Harper government warned of back-to-work legislation. Three years earlier, federal back-to-work legislation was enacted to end a 10-day strike.

CP Rail said it was disappointed with the outcome of the vote given that both final offers provided for “significant improvements to wages, benefits and working conditions that are consistent with agreements recently reached with other CP unions in both the United States and Canada.”

Negotiations were set to restart with agricultural customers warning that they can’t afford to see a work stoppage after seeing their livelihoods threatened when grain shipping came to halt because of extreme cold.

“The railroads are finally delivering a little bit better service than they have for the past six months and we’re still over 20,000 rail cars behind so we certainly don’t have any time to have a work stoppage now,” said Todd Lewis, president of the Agricultural Producers Association of Saskatchewan.

“I think with past history it’s hard to be optimistic, but stranger things have happened,” Lewis said in an interview.

CP Rail previously warned that a work stoppage would hurt its ability to provide safe and efficient freight and passenger/commuter service.

Via Rail Canada, Greater Toronto transit operator Metrolinx, and the The BC Rapid Transit Co. have said it would result in some disruptions.

The potential work stoppage comes the same week the government enacted a law that holds railways to account on their commitments to move products to market and allows shippers to immediately take advantage of measures to seek financial penalties for service failures.

Federal Employment Minister Patty Hajdu urged the railway and unions to continue working to reach a fair deal that avoids any disruption in service after last month ordering the company’s offer be presented to union members in a vote administered by the Canadian Industrial Relations Board.

“Our government believes in the collective bargaining process and I remain hopeful that the parties will be able to negotiate new collective agreements,” she said in a statement.

The Calgary-based railway has offered two per cent annual wage increases and $1,000 to each member to drop a series of filed grievances.

The Teamsters bargaining team rejected the offer and was unhappy that the fatigue of its members wasn’t addressed by the company.

The vote strengthens the union’s hand by demonstrating to the railway that its effort to go around negotiators was misguided, said George Smith, a labour relations consultant and fellow at the School of Policy Studies at Queen’s University.

He said the vote allowed the Liberal government to buy some time to tackle other issues while it determines how it will respond if a negotiated deal isn’t reached.

“They are faced with the reality that the Canadian economy could take quite a whack with a national rail strike and especially at a time when there’s already complaints from customers around the country,” he said in an interview.

The Trudeau government will try to differentiate itself from its predecessor by allowing collective bargaining to continue and even for a strike to begin before it passes back-to-work legislation, Smith said.

“I think the next week to 10 days will be determinative.”

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Companies in this story: (TSX:CP)