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The shutdown of Canada’s two largest freight railways could soon come to an end.

Labour Minister Steven MacKinnon on Thursday afternoon said he is referring the labour dispute between Canadian National Railway Co. (CN), Canadian Pacific Kansas City Ltd. (CPKC) and the Teamsters Canada Railway Conference (TCRC) to the Canada Industrial Relations Board (CIRB) for binding arbitration.

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“As minister of labour, I am using my authorities under the Canada Labour Code, to secure industrial peace and to deliver historic and long-term solutions that are in the national interest,” he said during a press conference in Ottawa. “Under Section 107 of the Canada Labour Code, I have directed the CIRB to assist the parties in settling the outstanding terms of their collective agreements by imposing final binding arbitration.”

Binding arbitration gives the CIRB the authority to oversee the remaining negotiations as a third party and find a solution.

“I have also directed the board to extend the term of the current collective agreements until new agreements have been signed, and for operations on both railways to resume forthwith,” MacKinnon said.

The minister added that the government is asking the CIRB to specifically direct the resumption of activities and a return to work at the railways.

CN and CPKC issued a lockout notice to the 9,300 employees represented by the TCRC, notifying the union of a labour stoppage if no deal was reached as of midnight on Thursday. After intense negotiations in Calgary and Montreal, the deadline passed without an agreement.

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MacKinnon refused a request for binding arbitration by CN Rail a week ago.

“We have an impasse here, we wanted to give these negotiations the absolute possibility of concluding successfully, we see little prospect of that currently,” he said on Thursday.

The decision comes after business groups warned of the economic damage the lockout would cause to the Canadian economy. The railways transport an estimated $1-billion worth of goods a day.

The sticking points in negotiations for the union remain fatigue provisions for workers and what the union claims is a forced relocation scheme, which would have workers move across the country to fill labour shortages for months at a time.

MacKinnon could not provide an exact timeline on when the railways will resume operations since it depends on how fast the CIRB will begin its processes.

“I assume the trains will be running within days, but, again, I want to be deferential to the process that will unfold here,” he said.

• Email: jgowling@postmedia.com

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