The CNE projects losing around $1.5 million due to the “significant negative impact” of an ongoing labour dispute with locked out workers at Exhibition Place, according to the fair’s chief executive officer.

In a letter sent Tuesday and addressed to Mayor John Tory and Toronto city councillors, Canadian National Exhibition Association chief executive Virginia Ludy expressed the organization’s “mounting concerns” about stalled negotiations between the city and the approximately 400 members of Local 58 of the International Alliance of Theatrical Stage Employees (IATSE).

“While the CNEA has repeatedly asked the City of Toronto, Exhibition Place and IATSE not to take any action that could disrupt the 2018 CNE, the parties have so far ignored our pleas, resulting in the expected outcomes of significant lost revenue and increased expenses,” says the letter, obtained by the Star.

More than 400 stagehands and technical employees have been locked out since July 20, after months of bargaining. The union says negotiations broke down because the city wants to contract out IATSE jobs and allow tenants at Exhibition Place to bring in their own workers.

The city says Exhibition Place is trying to modernize its collective agreement to become more competitive with other event spaces.

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A special city council meeting was called Tuesday to address the labour dispute. Councillors voted to carry out at least some of the meeting behind closed doors because it revolved around labour relations — one of the circumstances in which council can call for closed sessions.

Council passed a confidential motion during the session. Tory said he was limited in what he could share because the instructions were confidential, but said they were “meant to move us in the direction I think we should all be moving which is to get people back to the negotiation table.

“We also said very much that the determination ultimately of what happens has to be left in the hands of the Exhibition Place board of governors because that’s the proper place for decisions to be made,” he told council.

A source with knowledge of the in-camera meeting said a proposal to urge both sides to accept arbitration failed to get majority support.

Instead, council passed a Tory-backed motion urging them to consider non-binding mediation.

Councillor Mark Grimes, chair of the Exhibition Place board, urged his colleagues, during the closed session, to have patience and trust his board, said the source who requested anonymity because of potential consequences for disclosing in-camera deliberations.

But many members of council voiced concern that the CNE’s small window to make profits is closing and a continuation of the lockout could do great damage to the fair.

The union and board of governors for Exhibition place were already in mediation before the lock out, said Justin Antheunis, president of Local 58.

Councillor Mike Layton, who sits on the Exhibition Place board said he was “disappointed in the direction that council’s taking.”

Ludy’s letter says the CNEA is “calling on all parties to come together to ensure the 2018 CNE is a success for the 1.6 million people who make our fair part of their annual end-of-summer tradition.”

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“We urge the mayor, the board of governors of Exhibition Place and Toronto City Council to take action by re-engaging with IATSE Local 58,” the letter adds.

“We are calling on Local 58 to end the picketing and related activities which are impacting the CNE and engage in a process to quickly resolve this dispute.”

The letter said picketing, “negative” social media activities by IATSE, and media coverage, were “discouraging ticket sales.”

Ludy said she had reached out to IATSE, initially to give the local an “opportunity to peacefully interact with our guests,” rather than picket. Ludy said the CNE had also offered to hire IATSE workers through a third party, and most recently offered to hire them in a “direct contractual agreement” to provide services.

Antheunis said the union “wanted to help the fair out” but ultimately did not agree to the CNE’s offers because workers would have still been locked out of other city locations like BMO Fields, Medieval Times and the Coca-Cola Coliseum.

“At that point we’re pitting some members against others.”

After workers were locked out by Exhibition Place, the union proposed going to interest arbitration to resolve the labour dispute. That means bringing in an independent third-party to make a binding decision based on evidence presented by both sides.

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Asked last week why the city did not agree to interest arbitration, Councillor Justin Di Ciano, vice-chair of the Exhibition Place board of governors, said they were “really not interested in some arbitrator coming in and not knowing the intricacies of how Exhibition Place operates.”

In the meantime, the CNE has brought in replacement workers, including workers from Quebec and Alberta, to assist with the fair.

Antheunis said his members had received “a lot of support from the entertainment industry,” including non-union Ontario workers in the sector.

“The union keeps wages high and gets non-union workers close even without them unionizing,” he said.

With files from Jennifer Pagliaro.

David Rider is the Star’s City Hall bureau chief and a reporter covering Toronto politics. Follow him on Twitter: @dmrider

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