The Canadian Pacific Railway strike means more than 2,000 non-striking unionized CP employees will be laid off, a spokesman for the company said Wednesday, as the federal labour minister said she may force an end to the work stoppage. 

"Unfortunately, with this unnecessary strike by the Teamsters, more than 2,000 other unionized CP employees will not be required and are being laid off," CP's Ed Greenberg said. "We expect this to grow by another 1,400 employees as their work, related to the operations of the railroad, is no longer required. This is in addition to the 4,800 Teamster-represented employees currently on strike."

The strike by engineers and other workers began Wednesday morning. The layoffs are a temporary measure, with CP saying the affected workers are not required when the trains aren't running.

Greenberg said the strike means tens of thousands of carloads a day of grain, coal, automobiles and other products won't be moving along nearly 24,000 kilometres of track in Canada and the U.S.

Back-to-work legislation

Earlier Wednesday, Federal Labour Minister Lisa Raitt said she was giving notice of legislation to force the union back to work.

Raitt urged both sides to keep negotiating but said she's being prudent by putting the legislation on the order paper in the House of Commons. The announcement came 10 hours after the workers went on strike.

"We want to make sure that they're doing the best that they can, but they understand as well that if they cannot conclude their deal, we will have the ability to intervene," Raitt told reporters in Ottawa.

"We want to make sure that the effect on the economy is being brought to people's attention and that we're keeping it in mind as it proceeds."

Raitt says the parties are still at the table but said late Wednesday afternoon that they seem to be far apart on the issue of pensions. She says the government estimates a strike could cost $540 million a week.

Raitt's statement 'consistent' with union attitude

The Teamsters Canada Rail Conference (TCRC) said in a statement later Wednesday that Raitt didn't threaten them with back-to-work legislation, and promised to stay at the negotiating table as long as it takes.

"Minister Raitt's comment is consistent with our attitude since the beginning of the negotiations," said Doug Finnson, TCRC vice-president.

"The minister wants the parties to continue talking and that's exactly what we're doing." 

The statement said Raitt "seemed inclined to give the parties time to find common ground."

"CP's management needs to understand that hiding behind the federal government is not going to resolve things," Finnson said.

Canadian Pacific's statement Wednesday evening said it respected Raitt's announcement and that it is willing to enter binding arbitration.

On Power & Politics with Evan Solomon, Raitt said there are three options for management and the union:

  • They negotiate a deal, which she said seems to be becoming more unlikely. 
  • They voluntarily go to arbitration, with an arbitrator of their choosing.
  • Both sides accept an offer Raitt says she made last week to stop the strike and agree to 120 days further mediation with an expert provided by Labour Canada. Canadian Pacific accepted that offer but the Teamsters did not. "It's still there for them to take, and they should look at it," she said.

If they don't do any of those things, "They are leaving their destiny in the hands of Parliament," Raitt said. 

The House of Commons isn't sitting this week, with MPs working in their ridings, so the legislation isn't likely to start moving through Parliament until Monday.

Asked whether Canadian Pacific asked for the legislation, Raitt said no.

Last year, the government brought in back-to-work legislation for both Air Canada and Canada Post disputes — in the case of Canada Post, it ended a lockout.

In June 2011, the NDP forced the House to sit continuously for three days as the party fought the Canada Post legislation.

'The Conservatives are taking only one side'

NDP labour critic Alexandre Boulerice said he's concerned the threat of back-to-work legislation will skew the balance at the negotiating table in favour of Canadian Pacific.

"Once again the Conservatives are taking only one side and by threatening the union and the workers with back-to-work legislation, it removes a lot of pressure from the employer," said the Montreal MP.

"It constitutes another attack against the rights of the workers to associate and to freely negotiate."

The workers went on strike early Wednesday morning after last-minute negotiations failed. Freight service was then suspended across the country.

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Officials with the railway and the union met with Raitt on Tuesday morning, where they agreed that commuter trains in Montreal, Vancouver and Toronto will keep running in the event of a strike. That means 65,000 Canadians were able to get to work as usual Wednesday morning, Raitt said.

Two intercity Via Rail routes in Ontario that use CP infrastructure will be affected by the strike. Via Rail said on Wednesday that passengers travelling between Ottawa and Toronto will have to take buses between Ottawa and Brockville, with train service still available on the journey between Brockville and Toronto.

The Toronto to Sarnia route is also affected, with four trains cancelled — numbers 85, 86, 88 and 89 — and buses provided as an alternative. Trains from White River to Sudbury have also been cancelled  numbers —185 and 186 — with buses providing alternate transportation.

The TCRC represents 4,800 engineers, conductors and rail traffic controllers in Canada. The union and CP have been negotiating since October in an attempt to renew the collective agreements that expired Jan. 1, 2012.

Finnson says the major points of contention for the union are pensions, some work rules and fatigue management.

Management shakeup at CP

The strike comes at a time of major changes at Canada's second-biggest railway. A bruising months-long proxy fight with the railway's biggest shareholder culminated last week in Fred Green's exit as CEO.

New York hedge fund Pershing Square Capital Management argued the railway was lagging under Green's leadership and that a change was necessary.   

Green and five other board members stepped down hours before the company's annual general meeting last Thursday after shareholders voted overwhelmingly for director nominees on Pershing's slate.   

The Teamsters' Finnson said the union has not yet met with Green's interim replacement, Stephen Tobias. He said the management shakeup has not affected the bargaining process.

With files from CBC's Laura Payton and The Canadian Press