Canada's pro-business reputation at risk, Raitt says, in ending CP Rail strike

OTTAWA – The Conservative government introduced back-to-work legislation for 4,800 striking Canadian Pacific Railway workers Monday, saying Canada’s entire economy was at risk along with the country’s international reputation.

A phalanx of five Conservative cabinet ministers delivered the dire warning in Ottawa, backed by Finance Minister Jim Flaherty in Toronto, marking the third time in the last year the Harper government has intervened in a national labour dispute.

“Simply put, the strike can’t go on,” Labour Minister Lisa Raitt told the House of Commons. “We need to get the trains running again.”

Raitt said she expects the railroad’s freight service to be back in business by Thursday. The government is limiting debate on the back-to-work bill and will speed it through the Commons and Senate.

Workers have been off the job since last Wednesday, when the government first vowed to legislate an end to the labour dispute.

Canadian Pacific spokesman Ed Greenberg said once the legislation passes, “our company will shift our attention to fully preparing for a timely and disciplined ramp-up in operations with a view to achieve full production levels as soon as possible for the benefit of all our customers.”

Mediated contract talks between the railway and the Teamsters union representing locomotive engineers and conductors collapsed Sunday.

Raitt said Canada’s reputation as an international business partner is at stake, and that CP Rail’s operations affect a million workers in the bulk shipping industry while impacting half a billion dollars worth of economic activity each week.

“The work stoppage is preventing our ability to keep products moving in and out of Canada and that undermines Canada’s reputation as a reliable place to do business,” said Raitt.

Natural Resources Minister Joe Oliver called rail transportation “essential to maintaining jobs and prosperity for Canadians,” while Flaherty cited the strike as a potential “shock” that could derail Canada’s economic recovery.

“Fortunately we’re looking at modest growth in Canada this year but we don’t want that jeopardized or endangered by a particular labour dispute affecting a very important cog in the Canadian transportation system,” Flaherty said in Toronto.

Agriculture Minister Gerry Ritz twisted the knife by saying Canadians can be proud to have a government that’s ensuring “our economy is not jeopardized by risky union tactics.”

The Teamsters Canada Rail Conference says the company is demanding up to a 40 per cent cut in the earned pensions of unionized employees, after posting a $570 million profit last year.

“We’ve spent our entire careers paying for this, contributing to this and relying on this (pension plan),” Doug Finnson, union vice-president and chief negotiator, told a news conference on Parliament Hill.

“And because the shareholders want increased value, they want to squeeze it out of our pension plan and then put it over to the shareholders.”

The labour unrest comes amid front-office turmoil that saw CP’s chief executive officer Fred Green and much of the old company board forced out by an investor revolt, led by New York-based Bill Ackman of Pershing Square Capital Management LP.

The departing CEO, who Ackman accused of running an underperforming company, ended up walking away with an $18-million severance package, a point dryly noted by several Liberals.

Interim party Leader Bob Rae said he’d like to see the company and union discuss their impasse at a Commons committee before MPs vote on the back-to-work bill.

“There are significant issues around pensions — particularly given the huge, whacking severance that the company gave to its retiring CEO,” said Rae.

Critics say the Conservative government’s heavy-handed use of back-to-work legislation is undermining the right to collective bargaining and will hurt the wages of all workers, unionized or not.

Ken Georgetti, president of the Canadian Labour Congress, called the government’s quick fix “a fool’s paradise.”

“It will poison the workplace environment,” Georgetti said in a release. “Workers who have been bullied will find ways to make their displeasure known and that could be disruptive.”

The legislation gives a federally appointed arbitrator 90 days to impose a deal on the company and workers. In the meantime, unionized employees go back to work under the old contract.

Job action is prohibited — either strike or lockout — with fines of up to $50,000 on individuals and $100,000 on the union or company.

The labour minister, as she has done with previous labour disputes at Air Canada and Canada Post, cited the damage to the economic recovery for quickly legislating an end to work stoppages.

But Raitt continued to hold out hope that a negotiated deal could still be found. In the case of both Canada Post and Air Canada, workers ended up returning to the job under the threat of the legislation, without actually being forced by law back to work.

But her critics said the Conservatives are ruining the concept of free collective bargaining.

“If employers know they can count on the government to intervene on their side to put an end to collective bargaining, then there’s less need for them to have good-faith negotiations at the bargaining table,” said Peggy Nash, the NDP finance critic and a former union negotiator.

“You always have a better outcome when the two parties freely come to an agreement on their own.”

The government says a prolonged strike by CP Rail workers could cost the Canadian economy $540 million a week but the lofty numbers did not impress NDP House leader Nathan Cullen.

“I don’t understand why the government doesn’t include workers when it talks about the economy … people working are the economy,” said Cullen.

“And this government seems to have no concern for them, particularly if they hold a union card.”

He said all workers should be worried by the government’s actions.

“It will suppress wages whether you’re in a union or not.”

Indeed, the Teamsters union claims CP management was negotiating in bad faith in the full knowledge the federal government would ride to the rescue.

“It’s only because the government is going to act that CP is not at the table,” said Finnson. “That’s the only reason they’re not here, because they think they have an insurance policy in the federal government.”

The company contests that version of events, saying it agreed to a government-proposed extension of 120 days in the negotiations, an option the union rejected.

“We even offered to jointly agree on a third party process to settle the issues,” Greenberg said in an email. “Again, that was turned down by the Teamsters.”

Whatever the outcome of the arbitration, Finnson said Canadian workers should sit up and take notice.

“If CP hits a home run on this one and they can steal our pension money, other employers are going to line up and try to do the same thing, I suspect,” said the union negotiator.