(Reuters) -Canadian Pacific Railway will lock out its employees in 72 hours if there is no agreement with a union, the company said on Wednesday, a move that would potentially disrupt the movement of grain, potash and coal at a time of soaring commodity prices.
CP has commenced work stoppage contingency plans and will gradually work to wind down its Canadian operations, unless the parties come to a negotiated settlement or agree to binding arbitration, the company said.
The company said it had tabled an offer to address issues of wages, benefits and pensions but it was rejected by the Teamsters Canada Rail Conference (TCRC) union on Wednesday.
"Delaying resolution would only make things worse. We take this action with a view to bringing this uncertainty to an end," CP's chief executive officer, Keith Creel, said.
The union confirmed that it had been served with a lockout notice from Canadian Pacific (NYSE:CP) and said, "At the bargaining table, CP continues to dismiss our members' demands and are unwilling to negotiate the issues they have created."
TCRC is willing to remain at the bargaining table until the lockout deadline on March 20 and beyond to reach a negotiated settlement, it said in a statement.
Canada, Russia and Belarus are among the main sources for the world's potash, a key input required for producing nitrogen-containing fertilizers.
Concerns about fertilizer supplies have peaked since Russia's invasion of Ukraine and sanction on Belarus.
Canadian federal mediators are assisting the two sides in talks and the government is encouraging both parties to consider making the compromises necessary to reach a fair deal, Minister of Labour Seamus O'Regan Jr said in a statement.
The Canadian government can seek to pass legislation that will order workers back to their jobs if they strike.