TORONTO (Reuters) - Air Canada and its 3,000 pilots will continue labor negotiations with the help of a government-appointed mediator, even as the pilots voted overwhelmingly in favor of giving their negotiators the option to call a strike.
The Air Canada Pilots Association said on Tuesday that its members voted 97 percent to give their union representatives a strike mandate. More than 97 percent of the pilots at the nation's biggest airline took part in the vote.
"This vote demonstrates that Air Canada pilots are united in their desire to reach a freely negotiated agreement," said Paul Strachan, president of ACPA.
The union said in its statement that negotiations would continue with the assistance of a new federal mediator.
With the two sides still far apart, Canadian Labor Minister Lisa Raitt urged negotiators to keep working toward a contract agreement, offering them a new mediator on Tuesday for up to six more months of talks.
The offer from Raitt, who stepped in last year to stop two other labor disputes at the country's largest airline, came as a "cooling off" period in the contract dispute expired, though neither side signaled that it would break off talks.
Later in the day Raitt said that the two sides were "really far apart".
"I have spoken to both parties and they both have different perspectives on what the main issues are," she said in an interview with CTV.
She added that Air Canada had told the government it will submit to the mediation process.
Air Canada is now legally entitled to file 72 hours notice of its intention to impose a lockout but said on Monday it had no plans to do so. It said talks would extend beyond the end of the cooling-off period.
With a strike mandate in hand, the union could now file a 72-hour notice of its intention to strike. But it repeated on Tuesday that the pilots did not want to strike.
"Pilots were forced to take this vote as a defensive measure because the corporation chose to put itself in a legal lockout position," Strachan said.
Accepting the government's mediation offer would not preclude a strike or lockout.
The mediator appointed to join the talks is retired judge Louise Otis, ministerial spokeswoman Ashley Kelahear said. Otis most recently helped Air Canada reach a tentative contract agreement with its large mechanics union.
Raitt repeated later in the day that a work disruption at Air Canada could harm the country's economy, a justification she gave last year for the government halting two labor disruptions at the airline.
"Our government believes that a work stoppage at Air Canada is contrary to the best interests of hardworking Canadians, Canadian companies and, already, to the fragile economy," Raitt said in the House of Commons.
She added that the best solution was one "the parties find for themselves".
ACPA's chief worry in the talks is that Air Canada plans to outsource "good Canadian jobs", Strachan said.
A leaked internal memo earlier this month showed that pilots are concerned that Air Canada wants to set up a planned low-cost carrier offshore, where it would be able to tap cheaper labor than at home. The subsidiary is expected to be modeled on Qantas's low-cost offshoot, Jetstar.
The pilots' collective agreement expired March 31, 2011. They voted down a tentative agreement in May, partly because of concerns about the impact on jobs and wages of a low-cost carrier.
Air Canada has now reached new contract agreements with all its major unions except for the pilots. In a sudden burst over the weekend, it reached three tentative deals in three days.
Shares of Air Canada ended unchanged at C$1.04 on Tuesday on the Toronto Stock Exchange. The stock is down nearly 70 percent in the past year, partly on concerns about labor disruptions.
Reporting By Allison Martell in Toronto, Nicole Mordant in Vancouver and Randall Palmer and Louise Egan in Ottawa; editing by Rob Wilson