TORONTO (Reuters) - Talks between Canadian Pacific Railway Ltd and the union representing 4,800 striking locomotive engineers have broken down, paving the way for the government to bring in legislation forcing them back to work, the company said on Sunday.
The Canadian government, concerned that a rail strike could hurt an economy still struggling with the aftermath of the last recession, had said it was prepared to introduce the legislation.
"The mediator has withdrawn," CP Rail spokesman Ed Greenberg said by email. "The legislative process will now commence."
The back-to-work bill has yet to be formally introduced in Parliament. If the government speeds it through the legislative process, it could become law this week.
Members of the Teamsters Canada Rail Conference walked off the job on May 23 after talks over pension issues broke down, shutting down freight traffic across the country.
The union was not immediately available to comment on Sunday's news, but a message on its Twitter account, @TeamstersCanada, said mediators were no longer involved in its discussions with CP, and no further talks were planned.
The majority Conservative government previously used back-to-work legislation to end strikes at Air Canada and at the Canada Post mail services.
A spokeswoman for Labor Minister Lisa Raitt said that government mediators had offered every support possible, but despite months of conciliation, the parties remained far apart.
"FMCS (Federal Mediation and Conciliation Service) proposed a process of voluntary arbitration to resolve the dispute and tabled with the parties draft terms for arbitration that represent a compromise between the position of both parties. Unfortunately, the parties rejected this," spokeswoman Ashley Kelahear said in an e-mail.
"We have now withdrawn the services of FMCS. Should the parties want to move forward, they can always ask the FMCS back."
Kelahear did not respond to a question asking whether back-to-work legislation would be introduced on Monday.
Speaking on CTV's "Question Period" before the talks broke down, Raitt did not say when the back-to-work legislation might land, but noted that the government had got procedural steps out of the way in case it needed to move quickly.
"Still, you have to go through the process in Parliament, so things don't move fast there at all," she said.
The labor minister also said that the government had consulted with businesses to see how deeply the strike was hampering their operations.
Companies across a range of industries have scrambled to find alternative ways to ship their grain, coal, fertilizer, autos and other goods as CP trains sit idle.
One industry group, Canadian Manufacturers & Exporters, called on Sunday for the federal government to immediately intervene to end the dispute.
"Over the past week, we've heard directly from members, large and small, from all sectors of the economy, who have indicated the labor disruption at CP is having a significant impact," it said in a statement.
CP is Canada's second largest railroad. Its routes are mostly in western Canada and in the United States, although the U.S. operations are not affected by the strike.
($1 = $1.03 Canadian)
Additional reporting by Janet Guttsman and Susan Taylor; Editing by Nick Macfie