Labour Minister Lisa Raitt is poised to introduce back-to-work legislation today after negotiations between Canadian Pacific Railway and the union representing 4,800 striking locomotive engineers and conductors broke off Sunday.

Both sides in the strike that began last Wednesday rejected a proposal made by the government-appointed arbitrator, according to Raitt, who told CBC News she was "disappointed."

Raitt will be providing an update to the media this afternoon at 1:45 p.m. ET and will be joined by Transport Minister Denis Lebel, Natural Resources Minister Joe Oliver, Industry Minister Christian Paradis and Agriculture Minister Gerry Ritz.

Raitt said on Sunday that she would consult with her colleagues and she had already received concerned phone calls from the mining, manufacturing and agriculture industries. She also said it was important to hear from the businesses that have contacted her cabinet colleagues to determine what areas of the economy are being affected by the strike, and "whether we move quickly," she said.

The Federal Mediation and Conciliation Service (FMCS) made a proposal to get both parties to voluntary arbitration, but "both parties very quickly, within an hour, came back and said no," said Raitt.

Labour Minister Lisa Raitt could introduce back-to-work legislation to end the strike as early as Monday. (Fred Chartrand/Canadian Press)

The labour minister said it would be best if both parties worked out a deal for themselves, but short of the two sides resuming talks, Raitt is prepared to end the strike if necessary and could do so as early as Monday.

"I have to say there doesn't seem to be a prospect of a deal right now, and I'm extremely disappointed."

Ed Greenberg, spokesman for Canadian Pacific Rail, told CBC News on Sunday "the talks have ended and the legislative process, as I understand it, will now commence."

Raitt gave notice of back-to-work legislation last week after members of the Teamsters Canada Rail Conference (TCRC) walked off the job after talks broke down on pension issues, shutting down freight traffic across the country.

Doug Finnson, chief negotiator for the TCRC, told CBC News on Sunday that CP has been stalling because it knows that back-to-work law is looming.

"They [CP] want to rely on the government to get something for them instead of collective bargaining, and we believe their actions are essentially in bad faith," said Finnson.

As with two previous labour disputes — affecting Air Canada and Canada Post — Raitt cited the damage to Canada's economic recovery for the necessity of bringing the strikes to an end.

In this case, Raitt said the CP stoppage was costing the Canadian economy over $540 million each week it continued, putting thousands more jobs at risk if prolonged.

NDP House leader Nathan Cullen told CBC News on Sunday the government was eager to undermine the union's right to strike and arrive at its own agreements.

"It's unfortunate but not surprising," Cullen said of Sunday's developments.

Labour issues such as the back-to-work legislation and new employment insurance reform introduced last week are expected to dominate the agenda in the House of Commons which resumes Monday after MPs spent a week working in their ridings.