Labour Minister Lisa Raitt is warning she will bring in back-to-work legislation to end the strike at Canadian Pacific Railway, if the country’s economy is put at risk.

About 4,800 members of the Teamsters Canada Rail Conference including conductors, locomotive engineers and rail traffic controllers walked off the job early Wednesday, a move that has shut down CP’s entire freight service from Vancouver to Montreal.

That prompted the company to issue temporary layoff notices to 2,000 other employees whose jobs from yard to support services are not needed if trains aren’t running. Another 1,400 could get notices if the strike extends into next week.

Talks resumed Wednesday, with Raitt calling for a negotiated end to the strike.

“We want to encourage bargaining at the table,” she told reporters. “But they (the union and CP Rail) have to be aware of the fact that the Canadian government will step in on the basis of the national economy and the greater public interest at some point.”

If the work stoppage continues, it could cost $540 million a week in lost economic activity, Raitt estimated.

Federal New Democrats will look at the possibility of holding up passage, said labour critic Alexandre Boulerice, but he acknowledged the NDP cannot prevent the government from passing the legislation.

“You know, we can delay it a bit, but at the end of the day, this is a majority government and our battle is much more with public opinion,” Boulerice said in an interview.

Like the NDP, the Liberals criticized Raitt for what they said was taking sides in a labour dispute at a private company.

“Once again, while two parties are working towards an agreement, this Conservative government has already given notice of back-to-work legislation, shifting the balance of power and disrupting otherwise productive negotiations,” Liberal human resources critic Rodger Cuzner said.

With the Commons not sitting this week, the first opportunity to introduce back-to-work legislation would be Monday, Raitt said. But the government is not setting a deadline because the prime aim is to help the two sides in the strike reach an agreement, she said.

The ripple effects of the strike are expected to be felt in all sectors of the economy from coal, fertilizer, grain and auto. CP operates 24,000 kilometres of tracks from Vancouver to Montreal and into parts of the U.S. Midwest.

CP is still running trains in the United States, but shipments into and out of Canada are affected.

With just-in-time delivery, some companies will feel the impact of the strike almost immediately if they can’t get their supplies, while others won’t be able to ship finished goods, said Derek Lothian, a spokesman for Canadian Manufacturers and Exporters.

“We think immediate intervention is needed to bring rail service back online,” he said, adding alternatives including trucking or CN Rail may not be available or are costlier.

CP’s Ed Greenberg said the company will co-operate with any decision by Parliament, but added that CP is willing to enter into binding arbitration to settle the contract.

“This is a completely unnecessary strike,” he said. “CP is seeking pension provisions comparable to those provided to employees represented by the Teamsters at other Canadian railways.

“The union has agreed to these provisions at the other railways — we are simply seeking the same to bring CP’s legacy pension costs into line to remain competitive into the future,” Greenberg said.

Doug Finnson, vice-president of Teamsters Canada, said the labour minister wants the parties to negotiate and that’s what the union is doing.

“CP’s management needs to understand that hiding behind the federal government is not going to resolve things,” Finnson said in a statement. “Workers’ health and safety and pensions are serious issues and they (the employer) would be wrong not to settle them.”

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Another looming concern is management at CP Rail, where a bitter proxy fight resulted in president and CEO Fred Green resigning abruptly last week. Six directors left the board, after it was clear they would lose in a shareholder vote.

Cost-cutting is clearly on the horizon as Bill Ackman of Pershing Square Capital Management, the largest shareholder, has promised investors, if better run, CP would deliver higher profits.

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