OTTAWA (Reuters) -Canada's two main rail companies said on Friday they would lock out employees on Aug. 22 if talks to negotiate a labor contract fail, a move that would bring the country's transport of goods to a halt.
A strike or lockout could cause significant economic damage in Canada, which relies heavily on its railway network, given its expansive geography and exports of grain, potash and coal.
Canadian Pacific (NYSE:CP) Kansas City , Canadian National Railway (TSX:CNR) and the Teamsters union agreed last week to restart stalled contract talks with the aid of a federal mediator.
Canadian National said in a statement it had lost faith in the negotiating process, citing what it said was the Teamsters' unwillingness to engage in meaningful talks, and formally requested Labour Minister Steven MacKinnon to intervene.
MacKinnon, who had earlier urged both sides to continue talking, was not immediately available to comment.
The Teamsters, unhappy about rail company proposals they say could jeopardize safety, said they would give 72 hours advance notice of any strike action.
CPKC said earlier it would start locking out workers on Aug. 22 to protect Canada's supply chains from the more widespread disruption that would be created should a work stoppage occur during the fall peak shipping period.
Teamsters spokesperson Christopher Monette said the CPKC announcement was "unexpected and needlessly antagonizing", given there were 13 days of negotiations left before Aug. 22.