Alternative to Congested Pipelines at Risk as Canada Rail Strike Looms

Canada's Teamsters labor union notified Canadian National Railway of plans to strike early Tuesday after a stalemate in contract negotiations , threatening an important shipping alternative to congested pipelines for Alberta's oil producers.

Canada's Liberal government sent two ministers on Monday to meet with railway and union representatives as already hard-hit shippers pleaded for government intervention to avert the planned strike.

Crude oil shippers in Alberta have also increasingly used trains in the past year to reach U.S. refineries as an alternative to congested pipelines.Canada, one of the world's biggest exporters of farm products, also relies on its two main railways to move canola and wheat over the vast distances from western farms to ports.

CN, the largest Canadian railroad operator, was expecting slightly lower fourth-quarter crude shipments from the third quarter, officials said on an Oct. 22 conference call.

Slumping commodity prices, constrained oil pipelines and a dispute with China that has hampered Canadian agriculture exports have pressured the economies of resource-rich western provinces.

CN offered the Teamsters Canadian Rail Conference a binding arbitration, which the union declined, CN's Chief Operating Officer Rob Reilly said in a statement.

Labor Minister Patty Hajdu and Transportation Minister Marc Garneau were to meet with representatives from CN, the country's largest railroad operator, and the union in Montreal, Hajdu's press secretary Veronique Simard told Reuters, following a stalemate in contract negotiations.

A Teamsters Canada spokesman said the planned strike by its conductors, train personnel and yard workers comes because workers are "hitting a wall on issues related to health and safety," not wages.

"While we continue to negotiate in good faith and in hopes of avoiding a labor dispute, we have every intention of striking at 0:01 am ET tonight unless an agreement can be reached before then," spokesman Christopher Monette said by email.

- Reuters

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