The federal government served notice Tuesday that it is willing to legislate an end to the Air Canada strike as early as Thursday if the airline and its customer service and sales staff can't reach an agreement on a new contract.

The workers walked off the job at 12:01 ET Tuesday after failing to reach a deal with the airline.

"We will put on notice tonight legislation to ensure continuing air service for passengers," Labour Minister Lisa Raitt said Tuesday in the House of Commons.

Under the notice, the government can table back-to-work legislation in as little as 48 hours, it can delay it longer, or it can opt to not table legislation at all.

"I really want them to do a deal on their own — I think the best deal you're ever going to get is the one that you do," Raitt said on CBC's Power & Politics.

"But they've got a duty to Canadians to get a deal done, and when they can't get a deal done and it ends up having an impact either on Canadians in general or on the economy, then that's the role of the government and we've clearly stated our intention," she said.

Air travellers faced some delays Tuesday, but Air Canada reiterated that it is still operating its full flight schedule, with managers stepping in to replace striking workers.

'Clear interference'

The Canadian Auto Workers, the union representing the striking workers, said they were frustrated by the government's decision to announce the possible legislation less than 24 hours after workers walked off the job.

CAW president Ken Lewenza said he thinks it is possible to reach an agreement with Air Canada in the next 48 hours, but he expressed concern about the possibility of back-to-work legislation.

"This action by the government is a clear interference with the right to free collective bargaining," Lewenza said in a statement.

"The speed at which this legislation has been tabled points to a very real collusion by the Conservative federal government and Air Canada, to strip workers of their rights."

Raitt said the government acted quickly because there was no way to know when the situation might deteriorate.

"The reality is the Canadian public wants to make sure that they have the ability to fly, and we want to make sure that the economy is strong," she said.

She noted that federal government was in touch with both the company and the union, and was willing to help as the two sides try to reach an agreement.

The union said picket lines will continue at locations across the country.

'Full flight schedule' continues

Air Canada spokesman Peter Fitzpatrick said the airline is treating the work stoppage the same way it would a severe winter storm or some other irregular operation.

"We have a contingency plan that is quite robust," said Fitzpatrick. "We have 22,000 other Air Canada employees who will continue to show up and work.… We are planning to work a full schedule."

Management was filling in at customer service desks and gates, and pilots and other workers were still on the job Tuesday.

"It's been quite successful so far," Fitzpatrick said Tuesday.

Travel advice

Air Canada is urging passengers to avoid delays by taking these steps:

  • Check in for flights online. (There's a tutorial offered at its website.)
  • Avoid travelling with checked luggage.
  • Arrive at the airport well ahead of deadlines.

A union representative was skeptical.

"That can't happen," said Corinne Aubin, vice-president of the western region for Local 2002, after workers walked out in Edmonton. "We have 3,800 workers that are out, that are experienced. Their average experience is 20 years … you don't replace that with somebody who took a two-week training course.

"I think the public will suffer. They'll see the long lineups, they'll see the delays ... I feel quite heartbroken for the passengers," said Aubin. "This isn't what we wanted."

There could potentially be many more Air Canada workers off the job. The Canadian Auto Workers, which represents the striking workers, has called on employees with other unions — including pilots, flight attendants, mechanics and baggage handlers — not to cross the picket lines.

Some Air Canada pilots and flight attendants at Montreal's Trudeau airport initially refused to cross the picket line, CBC's Lauren McCallum reported. They waited for managers to escort them into the building, and the employees crossed and went to work after about 30 minutes.

Lines had been moving smoothly earlier, but were getting longer.

In Calgary, several travellers told CBC News that they were not experiencing delays.

Most flights are departing Vancouver on time, but some flights were delayed for an hour or more.

Victoria's airport authority said it didn't anticipate any disruption, as there are no Air Canada employees working there. They say the employees at the Victoria International Airport are with Air Canada Express, a different company with a different union local.

Pensions a sticking point

Air Canada chief operating officer Duncan Dee said the pension sticking point concerns a defined contribution plan for future employees hired after January 2012.

"Private sector companies in this country are shifting to defined contribution plans generally …," he said on CBC Radio's Metro Morning in Toronto. "The only way we can ensure the long-term viability of Air Canada and thereby ensure the long-term employment of our employees is making changes to keep up with the times."

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Striking Air Canada customer service agents walk the picket line in Halifax early Tuesday morning. (Andrew Vaughan/Canadian Press)

In defined contribution plans, money is paid into an independently managed investment plan similar to an RRSP, with employees assuming some of the risk. With older, "defined benefit" plans, money is paid into a pension fund, and the company is responsible for making predefined payments to retirees.

Dee apologized to customers for the inconvenience caused by the labour dispute. "Hopefully, it's not a dispute that will last too long. We're ready to the bargaining table at any time."

Discussions had seemed to progress positively through Monday, Lewenza said, but the airline's position on the employee pension plan proved intractable.  

"For them to stick to their position after considerable debate is surprising and disappointing," he said. "I don't think Air Canada put the customers front and centre on this particular dispute."

Current employees would be able to retire with a full pension at age 55 after 25 years of work, but Fitzpatrick said it was standard industry practice for new hires to receive lesser benefits.

Social media

Passenger updates  from the Air Canada strike

"We think it's unfortunate that the CAW has allowed ideology to overrule the best interests of their members."

Wages remain an outstanding issue as well, said Lewenza.

'We recognize the significant sacrifice our members have made in the past decade and are asking our members to be rewarded based on the fact that there's been 75 per cent productivity improvements in the workplace.

"If you improve productivity in the workplace, then workers are entitled to get some dividends as a result," said Lewenza.

Air Canada reported a net loss of $19 million in the first quarter of this year, and in May said it expected higher fuel prices to add $800 million to its costs in 2011.

With files from The Canadian Press