A threatened strike by CN Rail engineers is a big worry for farmers and other business people in Alberta. ((James Hees/CBC))

A threatened rail strike by Canadian National engineers, which could begin at midnight Friday night, is worrying Alberta business owners and farmers.

"We fill a rail car every hour at our site here in Fort Saskatchewan, as well as our site in Prentice, outside of Lacombe, Alta.," said Shawna Bruce, a spokesperson for Dow Chemical, one of CN's biggest Alberta customers.

"Every hour we have a rail car that is loaded and ready to depart. So we're hoping they will come to a quick resolution."

The union says the dispute is over stalled negotiations for a new contract and a plan to make engineers log an additional 500 miles (800 kilometres) a month beyond what was stipulated in their last contract, which ran to Dec. 31, 2008.

Mark Hallman, a spokesman for CN, said the two sides sat down Friday in Montreal for more negotiations. Negotiations started at noon ET.

"Earlier this week, because we needed to move forward, we announced a 1.5 per cent pay increase, and that we'd increased the monthly mile cap to 4,300 miles from the existing 3,800 miles," Hallman said.

The company's preference, if no deal can be reached through bargaining, is to submit the issues to binding arbitration.

"It would be a far preferable way to handle the issues than to have a very damaging strike that could hurt the economy at a very sensitive time."

Domino effect for lumber wholesaler

Taiga Building Products in Edmonton uses CN to bring in 10 carloads of lumber products every month that are sold to retail outlets.

"If I don't have that material, our customers, the lumber yard wouldn't have the material to ship to homebuilders, who won't be able to finish jobs because they don't have the materials that they need," said Jackson Briggs, general manager of Taiga.

During a strike, materials would have to be brought in by truck, which would be twice as costly, Briggs said. Those extra costs would be passed on to consumers.

A rail strike would also be hard on farmers with contracts to sell grain through ports on the West Coast.

"Things are set out months in advance, according to a schedule, and a disruption in service will certainly result in some fines and some penalties and losses in sales," said Rod Scarlett, head of Wildrose Agricultural Producers, a co-operative farm organization in Alberta.

If the strike does go ahead, Scarlett said, it's coming at a bad time. Farm yields for 2009 are lower than average and grain prices have fallen, as well.

With files from The Canadian Press