Bloomberg News

Canada Senate to Consider Bill Ending Railroad Strike

May 30, 2012

Canada’s House of Commons passed legislation forcing an end to the weeklong strike at Canadian Pacific Railway Ltd. that clogged industry supply chains and hampered traffic at the country’s two biggest ports.

The law, which would send all unresolved issues between Canadian Pacific and its workers to binding arbitration, will now be debated in the Senate where ruling Conservatives may use their majority to pass the bill in one day. Labor Minister Lisa Raitt, who introduced the proposal, has said rail service may resume as early as tomorrow.

Freight traffic on the Canadian lines of the country’s second-largest railroad has been halted since Teamsters union members struck on May 23. Under Raitt’s bill, Canadian Pacific and the union would have 90 days to settle on a new contract or have a new labor agreement created by an arbitrator.

The Teamsters Canada Rail Conference, representing more than 4,000 engineers, conductors and rail-traffic controllers, is at odds with Calgary-based Canadian Pacific over matters including pension payments and work rules.

The railroad sought to cut costs after contributing C$1.9 billion ($1.85 billion) to its retirement programs in the past three years to reduce funding shortfalls, while union members resisted what they said was a 40 percent cut in post-retirement benefits.

The pensions helped push Canadian Pacific’s operating expenses as a percentage of sales above those of its peers. Those costs were criticized by activist investor William Ackman during a months-long proxy fight that led to the departure of CEO Fred Green and five other board members on May 17.

To contact the reporters on this story: Theophilos Argitis in Ottawa at targitis@bloomberg.net; Natalie Doss in New York at ndoss@bloomberg.net

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net


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