Canadian Pacific Railway Ltd. and the Teamsters agreed during talks with Labor Minister Lisa Raitt to keep operating commuter trains even if union workers walk off their jobs on the freight network, disrupting shipments of grain and coal.
The railroad, which refused an earlier offer by the Teamsters to keep operating the commuter trains, said the change was requested by Raitt and described it as a “demonstration of goodwill.” The Labor Minister is meeting with the railroad and the Teamsters in an attempt to avert a strike that may begin as soon as 12:01 a.m.
Canadian Pacific “continues to negotiate this afternoon and is cooperating in an effort to enable an agreement,” Ed Greenberg, a company spokesman, said in an e-mail. The railroad is willing to participate in binding arbitration or extension of the negotiation period for the Teamsters contract, both of which would require union consent or government action, he said.
Raitt, who has previously intervened to prevent or end work stoppages at Air Canada, the country’s largest airline, and Canada Post, said today that a strike would hurt the country’s economy. The work stoppage would also complicate operations for Canadian Pacific, which is seeking a new chief executive officer after a months-long proxy fight.
The Teamsters Canada Rail Conference, representing 4,800 engineers, conductors and rail-traffic controllers, gave the Calgary-based company a three-day strike notice on May 19 after contract talks failed to resolve issues including what the union described as proposed 40 percent cuts to the pension plan.
The Teamsters and management have been in negotiations since October and the Teamsters first threatened to strike in April. Today’s talks are expected to continue through a midnight deadline, the Labor Minister’s office said.
Canadian Pacific climbed 1.1 percent to C$74.92 at the close of trading in Toronto. Before today, the shares advanced 7.4 percent this year amid investor William Ackman’s proxy fight to replace CEO Fred Green.
During the campaign, which led to the departure of Green and five other board members last week, Ackman criticized the company’s high cost margins relative to its peers. Canadian Pacific blamed the disparity partly on its pension expenses.
The company has contributed C$1.9 billion ($1.86 billion) to its pension plans in the past three years to correct funding shortfalls, according to a May 19 statement. The rail carrier has said its costs excluding pension expenses are in line with those of larger rival Canadian National Railway Co. (CNR)
Ackman, whose Pershing Square Capital Management LP is Canadian Pacific’s largest investor, promised after last week’s shareholder vote to deliver on commitments to boost returns, while cautioning that improvement won’t happen overnight.
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