Federal agriculture minister 'hopeful' rail strike can be averted

CALGARY - Federal Agriculture Minister Gerry Ritz says he's hopeful mediators will be able to avert a strike by workers at Canadian Pacific Railway but if they don't, the government will take action to make sure the economy doesn't suffer.

The union representing 1,800 safety and maintenance workers and another union which represents 3,300 locomotive engineers, conductors, trainmen and yardmen across Canada have issued a strike notice for early Sunday morning.

The labour strife could hamper freight service across the country, but negotiations are ongoing in Montreal with the help of federal mediators.

A spokesman for federal Labour Minister Kellie Leitch confirmed the minister was in Montreal on Friday to "encourage all parties to work together to quickly reach agreements in the best interest of the Canadian economy."

In 2012, the federal government passed legislation to force an end to a nine-day strike by 4,800 striking members of the Teamsters union and CP Rail employees. Ottawa said at the time that a prolonged strike would cost the Canadian economy $540 million a week.

Ritz said a long rail strike by CP (TSX:CP) would have a significant impact on western grain producers but also on the forestry, potash and coal sectors.

"There's still a lot of product to move so there's never a lesser impact. It's just a different degree of hurt," said Ritz after a speech to the Western Barley Growers Association.

"At the end of the day, as a government we will look at all the tools we have available to us to make sure the economy doesn't suffer."

Ritz said it's too early to think about whether the federal government should get involved if there is a work stoppage.

"Hopefully not. As I said mediators on the ground are working hard and hopefully they're making progress," he said. "Those aren't done in public and I'm not going to detail it in public either."

In the event of a strike, Canadian Pacific said this week it would "implement its extensive contingency plan by deploying qualified management employees to maintain a reduced freight service on its Canadian network."

Follow @BillGraveland on Twitter. With files from Morgan Lowrie in Montreal.