The union representing customer service and on-board service workers at Via Rail said it's expecting to go on strike Friday, saying the latest offer from the railway company is nowhere near good enough.

"There's no chance to reach an agreement by the deadline," said Bob Orr, assistant to the president of the Canadian Auto Workers Union.

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Via Rail employees, members of the Canadian Auto Workers union, will be in a legal strike position by 12:01 a.m. Friday. (Canadian Press)

Via Rail presented its latest proposal on Wednesday, offering wage increases of two per cent a year over three years.

But the union said that its members will take home less money because the federal Crown corporation has proposed higher pension contributions.

The CAW also objects to plan that would slash pension benefits for new Via employees and the rolling back of income protections for seasonal workers.

However, Via said that its employees need to contribute more to the pension because it currently faces a $419 million deficit and the government-owned company has an obligation to taxpayers.

'A fair and reasonable offer'

"We feel this is a fair and reasonable offer," said Via president and chief executive Marc Laliberte in a statement.

"Unlike other companies in the rail industry, Via is a Crown corporation. We have an obligation to make the best use of taxpayer monies … This offer, in particular the parts related to pensions, will help ensure the sustainability of both our company and the pension plans, and that's in the long-term best interests of our employees."

In the event of a strike, management will continue to offer basic railway services, including daily trips in the morning and at the end of the day on the Quebec City to Windsor, Ont., corridor.

Long-distance trips and service to remote locations will be provided once a week.

The two sides have been in talks since the fall of 2012 and are currently in the process of mediation.

A strike deadline of 12:01 a.m. on Friday has been set.

The CAW represents about 2,000 customer service, on-board service and maintenance workers at the railway.