Canadian Pacific reaches tentative agreement with striking workers

(Reuters) - Canadian Pacific Railway Ltd said a strike by more than 3,000 workers over employment terms ended on Wednesday after the railroad operator reached tentative agreements with labor union Teamsters.

FILE PHOTO: A CP Rail train rolls across the prairies into the rocky mountains of near Canmore, Alberta, April 28, 2017. REUTERS/Todd Korol/File Photo

About a quarter of Canadian Pacific workers staged a walk-out on Tuesday night, throwing industries dependent on its transportation into disarray.

The second-largest Canadian railroad operator said it had reached four- and five-year agreements with its employees.

The company did not provide further details on the agreements but Teamsters Canada in a statement said operations at the company’s affected facilities would resume on Thursday.

CP’s shares rose as much as 2.8 percent to a record of C$247.65 after the agreement was announced.

The strike came at a time of tight rail capacity in Canada, with CP and rival Canadian National Railway facing strong demand for shipments of grain, potash and other commodities.

Canadian oilseed processors weighed production cuts while miner Teck Resources said it was drawing up contingency plans anticipating delayed shipment of product through CP’s systems.

Canada is the world’s biggest grower of canola, also known as rapeseed. Crushers process it into vegetable oil for foods such as salad dressings and margarine, and into meal to feed cattle.

CP railroad workers, whose collective agreement expired late last year, were asking for more predictable schedules to combat crew fatigue, among other demands. The company, which employs 12,500 workers, is a leading shipper of grain, crude oil and frac sand in North America.

Earlier on Wednesday, industry bodies representing the mining, aluminum and fertilizer industries had urged the government to intervene in the issue.

“Large railroads are necessary building blocks of a country’s economy and it is worse right now because the other railroad operator, Canadian National, has had very tight capacity,” Loop Capital analyst Rick Paterson said.

Prime Minister Justin Trudeau said in an interview with Bloomberg on Tuesday that his government supports the right to strike and would not intervene, as his predecessor had, “early and often” in labor disputes.

“We believe in working things out at the bargaining table... and we’ll use all sorts of levers to enforce that,” Trudeau told Bloomberg.

Labor Minister Patty Hajdu’s office also said that the Liberal government believes in “the collective bargaining process.”

CP reached an agreement with unions in April to postpone a strike, which would have been the third in six years at the railroad.

Additional reporting by Rishika Chatterjee in Bengaluru, Allison Lampert in Montreal, Anna Mehler Paperny in Toronto; writing by Nivedita Bhattacharjee; Editing by Shounak Dasgupta, Dan Grebler and Maju Samuel