© Reuters. FILE PHOTO: The Canadian Pacific Railyard is pictured in Port Coquitlam, British Columbia, Feb. 15, 2015. REUTERS/Ben Nelms/File Photo

By Rod Nickel and Ann Maria Shibu

(Reuters) – Canadian Pacific Railway (NYSE:) has shut down operations and locked out workers over a labor dispute on Sunday, with both sides blaming the other for a shutdown likely to disrupt shipments of important goods at a time of rising prices .

“We are very disappointed with this turn of events,” said Dave Fulton, spokesperson for Teamsters Canada Rail Conference. The union said in a statement that it has begun strikes across the country in the dispute that it says is affecting 3,000 engineers, conductors and garden workers.

Canada’s second-largest rail company accused the union of misrepresenting the company’s position, saying in a statement that the Teamsters are “well aware of the damage this reckless action will inflict on Canada’s supply chain.”

Labor Secretary Seamus O’Regan Jr said CP and Teamsters were still at the table with federal mediators.

“We are closely monitoring the situation and expect the parties to continue working until they reach an agreement,” he said in a tweet just after midnight.

Canada, the second largest country by area after Russia, relies heavily on rail to transport raw materials and manufactured goods to its port. CP’s network runs through much of southern Canada and extends south to Kansas City in the United States.

The lockout is the latest blow to Canada’s battered supply chain, which endured flooding in British Columbia last year, washing away rail tracks and cutting off access to Canada’s largest port. CP has said a shutdown would disrupt the movement of grain, potassium and coal.

CP had informed the union on Wednesday that it would lock out workers on Sunday unless there is a breakthrough in negotiations over a deal on pensions, wages and benefits.

It said the key negotiating issue is the union’s request for higher pension ceilings. Chief Financial Officer Nadeem Velani told an investor conference in New York on Tuesday that the railroad was unwilling to accept that demand.

Canada’s Nutrien (NYSE:) said this week it may have to cut potassium production at its mines in the province of Saskatchewan if the shutdown lasts longer than a few days.

The last major disruption to rail labor in the country was an eight-day strike by Canadian National Railway (TSX:) Co in 2019. But in the past 12 years, there have been 12 interruptions due to bad weather, blockages or labor problems, according to the Western Canadian Wheat Growers Association.

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This post Canada’s CP Rail Shuts Down Railroad, Workers Strike was original published at “https://www.investing.com/news/stock-market-news/canadas-cp-rail-shuts-down-railroad-workers-strike-2787981”

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