Canada Introduces Law to Force CP Rail Strikers Back to Work

Canadian Labor Minister Kellie Leitch introduced legislation aimed at ending a two-day-old strike by Canadian Pacific Railway Ltd. locomotive engineers and conductors, saying the walkout could have “lasting effects” on businesses across the country.

A disruption of rail services will lead to job losses and pose a “great risk” to the Canadian economy, Leitch told lawmakers in Ottawa on Monday. Every week of the dispute will probably curb gross domestic product by about C$205 million ($164 million), the minister said, without specifying the basis of her estimate.

“We’re doing this for the good of our country, and the good of the Canadian citizens,” Leitch said. “Our economy must be protected. Our products must reach markets. Canadian jobs must be preserved.”

Lawmakers in both the House of Commons, where the governing Conservatives hold a majority, and the Senate must approve the bill for it to become law.

Canadian Pacific management is operating reduced freight service on the railroad’s Canadian network after talks between the company and the Teamsters Canada Rail Conference failed to yield an agreement by the midnight local time deadline on Saturday.

“Without CP Rail operating, our ability to move freight is more limited,” Leitch said. “The strike in rail transportation in Canada has such an important impact on so many individuals and industries that the cumulative effects could be immense.”

Martin Cej, a Canadian Pacific spokesman in Calgary, and Doug Finnson, president of the Teamsters Canada Rail Conference, didn’t immediately respond to e-mail and telephone messages Monday seeking comment on the bill of law.

Companies’ Effort

Coal producer Teck Resources Ltd. and Spectra Energy Corp., a distributor of propane and butane, are among companies that have written to the government to urge the adoption of back-to-work legislation, Leitch said. Teck accounts for one-third of all bulk exports through the Port of Vancouver, she said.

Other industries have also been pushing for the government to legislate an end to the dispute.

“The sooner the strike can be resolved, the better,” Brian Otto, chairman of the Barley Council of Canada, an industry group of farmers and agricultural companies, told Canada’s ICI Radio-Canada television network in a telephone interview broadcast Monday. “The longer it goes, the more financial impact it has on Western Canada.”

Union Demands

Negotiations with the Teamsters, who represent about 3,100 workers, centered around union demands that the company comply with agreements requiring train crews to stop and rest after 10 hours of continuous work.

Canadian Pacific and the Teamsters “are not close to a deal,” Leitch said. “There are numerous issues on the table,” she added without being more specific.

Keith Creel, CP’s chief operating officer, estimated last week that the strike would cost the Calgary-based railroad about 1 cent a day in per-share earnings. Based on the company’s 166 million diluted shares outstanding as of the end of the fourth quarter, Creel’s estimate means that the strike could cost the company about C$1.7 million daily.

Creel and Chief Executive Officer Hunter Harrison are working on a four-year plan to boost annual revenue at CP to C$10 billion and more than double profit.