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More than 4,800 Canadian Pacific Railway Ltd. (CP-T) employees have gone on strike, stopping freight shipments.
The strike by the Teamsters Canada Rail Conference began at 12:01 a.m. ET on Wednesday, after the two sides in the labour dispute tried but failed to reach a pact late Tuesday night.
CP spokesman Ed Greenberg confirmed that Canada's second-largest railway has halted freight deliveries. "The union has withdrawn its services and as a result, CP has successfully executed the safe and structured shutdown of its freight train operations in Canada," he said.
The labour tensions have risen just days after activist investor Bill Ackman scored a resounding victory last Thursday in a proxy battle against CP, resulting in the resignation of Fred Green as CP's chief executive officer.
"We have made every reasonable effort to get a settlement," union official Doug Finnson said in a statement.
"Every union member knows how important the outstanding issues are. We will not walk away from the negotiation table," said Finnson, who is vice-president at the Teamsters Canada Rail Conference.
Management's attempts at watering down existing defined benefit pensions and placing new union hires on less costly defined contribution plans have been major sticking points.
Non-unionized Canadian employees at CP hired after July 1, 2010, have already been placed into defined-contribution pensions.
The union represents more than 4,800 conductors, engineers, yard workers and rail traffic controllers. The previous five-year collective agreement expired Dec. 31, 2011.
In a statement before the strike started, the Mining Association of Canada recommended that federal Labour Minister Lisa Raitt intervene in the contract dispute.
"We are urging the government to step in and impose binding arbitration," said association president Pierre Gratton.
CP and the Teamsters said that while freight shipments have been suspended, commuter trains in Toronto, Montreal and Vancouver will operate on Wednesday.
But Via Rail said its passenger trains in Ontario "operate partially over CP infrastructure," so service would be affected between Sudbury and White River, as well as the Brockville-Ottawa portion of the Toronto-Ottawa route.
"Via is considering all possible options for trains that are affected, and where possible will either detour or replace by bus for a portion of the trip," Via said.
The Teamsters and Calgary-based CP said further talks are scheduled for Wednesday in an attempt to break the impasse, with the federal conciliation and mediation service on hand.
"Our government is concerned that a work stoppage would have a negative effect on Canadian businesses and families, and the economy," Raitt said in a statement hours before the strike began.