Labor negotiations between one of Canada’s railroads and its unionized employees have appeared to hit an impasse ahead of a possible nationwide rail worker strike.

In a Friday update, the Teamsters Canada Rail Conference (TCRC) told its members that Canadian National Railway (CN) has remained “unreasonable” in handling the union’s contract demands.

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The update came a day after CN presented a new offer to the Teamsters, which included wage increases of 3 percent in 2024 and 2.5 percent in 2025.

This revised offer scrapped initial terms that had been previously rejected by the union, including an hourly pay scale that would have bumped wages to $65 an hour for conductors and $75 an hour for locomotive engineers regardless of road or yard service. Additionally, the offer includes a higher pay rate for “duty hours,” meaning any work comprising more than 10 hours in a shift.

Teamsters brass called CN’s revised offer “inadequate,” with the notice telling union members that it “decimates your collective agreements and compromises your safety in favor of operational ease and profits.”

The potential strike action of 9,300 workers at CN and Canadian Pacific Kansas City (CPKC), the other railroad currently in negotiations with the TCRC, was initially expected to occur as early as May 22, but is expected to be pushed back as the federal government regulator determines whether a strike would have an impact on nationwide safety.

Concerns from industry associations prompted Canada’s Labour Minister Seamus O’Regan to ask the Canada Industrial Relations Board (CIRB) to review whether the country’s railroads must continue to transport certain essential goods, like propane, in the event of work stoppages. The board said interested parties have until May 21 to file submissions.

Once a decision is issued, Canadian labor law requires 72 hours’ notice before a strike or lockout could begin.

CPKC said in its own update Thursday that a strike would be unlikely in the 60 days after due to the review. This would set a strike date for July, if negotiations don’t lead to a new deal.

A legal strike or lockout cannot occur until the CIRB renders a decision.

Freight forwarder OEC Group told customers in an advisory Wednesday that it is recommending that shippers reach out to their logistics consultants to begin preparing alternate strategies to ensure that cargo is not impacted by the potential labor action.

And in a May freight market update, third-party logistics (3PL) giant C.H. Robinson said it expects “many shippers will not want to risk waiting until May 22 to find out if the strike will happen and will start converting from rail to truckload in the days leading up to the decision to prevent supply chain failure.”

CPKC and the TCRC leadership resumed meeting on Friday with the assistance of federal mediators. The railroad proposed to the union that both parties agree on the services that should be maintained in the event of a strike or lockout.

“We believe this would eliminate the need for the CIRB referral process and bring much needed clarity regarding the timing of any potential strike or lockout,” CPKC said.

Negotiations between the union and both rail operators have been in flux since last fall, with the previous contracts expiring at the end of 2023.

If a rail strike does play out in late July, it would be a year after 7,400 dockworkers at ports in British Columbia stopped working across 14 days. That deal impacted $7.3 billion in merchandise shipments and cut Canada’s gross domestic product by between $533 million and $716 million, said national transportation regulatory body Transport Canada.

Concerns about a rail strike aren’t the only labor worries in Canada, with 730 union foremen at the West Coast ports represented by the International Longshore and Warehouse Union (ILWU) working without a new contract since April 1, 2023.

On Wednesday, the ILWU’s Local 514 branch said it would delay serving a 72-hour strike notice in order to take part in the federal mediation process. The talks broke down once last year after the contract expiration date, and once in January 2024.

The local is demanding direct talks with direct terminal employer DP World Canada, instead of the British Columbia Maritime Employers Association (BCMEA), saying its rights were confirmed under arbitration.

ILWU Local 514 contend the breakdown in talks involves three issues, including the use of semi-automation at the container terminal without bargaining for the technology change. Additionally, the parties are in arbitration over centralized dispatching and are also opposing the use of management instead of union members as dispatchers at the terminal.