Canadian Pacific Railway's new CEO says his top priority is to expand business in both Canada and the U.S. but he acknowledges he faces deep employee unhappiness and a potential showdown with the railway's main union after years of deep cuts and tumultuous change.

CP has undergone a dramatic restructuring since 2012 that has helped boost its net profit from $484 million that year to $1.6 billion last year. But the upheaval has left workers scarred after thousands of layoffs, two strikes and rocky employee-management relations.

"In a four-year period, to go from effectively worst back to first, it's transformational. It's amazing," Keith Creel told CBC News in his first interview since taking over from his mentor, Hunter Harrison, who abruptly resigned in January to run CSX railway in the U.S.

CP workers huddle around a fire while on strike at the Cote Saint-Luc rail yard in Montreal back in February 2015. The company's current contract with conductors and engineers is set to expire at the end of 2017. (Canadian Press)

Creel, an American, joined Harrison a decade ago at CN Rail and followed him to CP in 2013 as the duo overhauled and restructured both of Canada's two main freight railroads.

"We haven't gotten it all right," Creel said. "We're stronger now, we're more stable now, but at the same time, to me, to bridge the gap that's created over the past four years ... is what I'm focused on doing."

In recent weeks, Creel has signalled his desire to start a "new chapter" by holding town hall meetings with more than 1,300 employees in Vancouver, Calgary, Winnipeg, Toronto and Montreal, with several more gatherings planned for Chicago, St. Paul, Minn., and back to Calgary.

He's also relaxed a CP policy on suspensions and firings, and begun to repaint locomotives with the company's iconic beaver logo, which he believes represents a deep — and sometimes forgotten — company pride.

"I'm trying to let people know that I'm listening and that I care," Creel said.

Deep rift

Creel's challenge, however, is that as Harrison's deputy he was responsible for axing thousands of jobs, closing rail yards and overseeing an era marked by labour strife, punitive discipline, firings and a constant battle over working conditions.

Creel acknowledges it has all left deep scars.

CP CEO tells CBC's Dave Seglins healing rifts with workers, growing business are top priorities 49:45

He hopes to change that and thinks his town halls will help. He described his recent gathering in Winnipeg as an example.

"I sat there for 2 ½ hours and those people spoke their mind," he said. "Now, would they have done that two years ago? I'm not sure. But I know they did it two days ago, and that's exactly what I'm trying to encourage."

Doug Finnson, head of the Teamsters Canada Rail Conference, says employees he speaks with are waiting for management to 'walk the walk.' (Sean Kilpatrick/Canadian Press)

Beyond town halls, one of the new CEO's first face-to-face meetings was with Doug Finnson, head of CP's main conductor and engineer union, the Teamsters Canada Rail Conference. Creel says he wants to forge a new relationship and establish some labour peace moving forward.

Finnson is cautiously optimistic.

"I have to give him credit for meeting with us, an initial meeting. I think he's got a real challenge but a real opportunity," Finnson said this week. "But the mountain he has to overcome is very high."

The union leader says employees he speaks with are pleased to hear there will be change, but they're waiting for management to "walk the walk."

Backlog of complaints

The list of workplace complaints at CP is long.

More than 1,000 workplace grievances filed by CP workers sit unresolved before a backlogged Canadian Railway Office of Arbitration, stemming from years of firings and complaints of excessive discipline.

CP has a long backlog of workplace grievances. (Darryl Dyck/Canadian Press)

In addition, employees complain of constant fatigue and a lack of predictable scheduling that often leaves crews on call 24-7.

"We are willing to negotiate any system that doesn't require the running trades to be on call 24-7, but it's a negotiation process," Creel said.

Many CP workers have told CBC News they want the company to revert to using a pool system, which they say provides a safer, more predictable schedule by assigning employees to specific rail routes and time windows.

"That's not efficient. It takes more bodies. It takes more people," Creel said. "I can't just throw money at the problem, I need to be efficient, and be safe."

Showdown looming?

But with CP's current contract with conductors and engineers set to expire at the end of 2017, Creel potentially faces another major showdown.

CP recently stepped up training and deployment of non-union managers and office workers to drive trains.

The union is demanding an end to this practice and has taken its fight to the Canada Industrial Relations Board, which has previously ordered CP to stop using managers to drive trains in all but "exceptional" circumstances or when no other employees are available.

CBC asked Creel if he intends to use managers and office workers to keep CP trains moving in the event of a strike.

"Yes, we'd have to. If they choose to strike, I've got a responsibility to still provide business to my customers, and if I don't, somebody else will. And when they come back from their strike, they're gonna have fewer jobs. Is that really in their best interest?"

CP workers picket outside the company's rail yard in Montreal back in May 2012. The company's use of managers and officer workers as engineers is a major issue of concern for the engineer and conductors union. (Ryan Remiorz/Canadian Press)

The issue is creating tense situations across the railway as unionized engineers aboard locomotives are routinely refusing to train the CP managers.

Creel is unapologetic, telling the unionized conductors and engineers they should step aside.

"I said, 'OK, we're not going to make you train us, but that's a CP train. That's a shareholder's train. That's not the TCRC employee's train."

The union's president, Doug Finnson, says Creel's attempts to build goodwill and peace won't succeed unless CP backs off. He says the use of managers as engineers is designed to undermine the union's bargaining power.

"I guess there's going to be a head-butting contest," he said. "That's just the way it's going to be. We are not backing down.

"Comes a point in time where everybody says, 'We're going to start treating you better.' OK, start treating us better. Stop talking about it and just do it."