Special Report - Canada: BC Rail lockout update

SPECIAL REPORT: BC Rail lockout

CANADA: BC Rail labor dispute talks break down

VANCOUVER -- A lockout that has idled Canada's third-largest railway entered its third day Wednesday after mediated talks to end the labor dispute at BC Rail Ltd. broke down, Reuters reported.

No new talks were scheduled in the contract dispute, which is snagged over a company demand for ``productivity improvements'' and wages, union officials told reporters.

Representatives of BC Rail Ltd., which is owned by the province of British Columbia, and its more than 1,500 unionized workers met with a labor mediator Tuesday, but the talks ended without an agreement.

A company spokesman was not immediately available for comment Wednesday.

The railroad authorized a lockout after the seven unions on Friday issued a 72-hour strike notice. Freight and passenger operations have been idled since noon Pacific time Monday.

BC Rail operates 1,446 miles (2,314 km) of track in British Columbia with a main line that runs from Vancouver to Fort Nelson. It had net income of C$26.5 million ($18.1 million) on revenues of C$417.6 million ($286 million) in 1998, according to its annual report.

The railroad has said it needs work rule changes to cut labor costs to offset economic problems caused by a decline in rates and shipments of its core business of timber products and coal.

The unions, which have been working without a contract for two years, argue the proposed rule changes will eliminate jobs and create safety problems.

UBCM chief urges premier to kick-start BC Rail talks

VANCOUVER -- Premier Dan Miller should get off the sidelines and kick-start stalled talks in order to end the shutdown of the BC Rail system now entering its fourth day, the president of the Union of B.C. Municipalities said Wednesday, the Vancouver Sun reported today.

The appeal by Steve Thorlakson was spurred by the collapse of mediated talks aimed at ending the lockout of the Crown corporation's 1,600 unionized members that has shut down Canada's third-largest freight railway since Monday.

"The ball is back in the premier's court," UBCM president Steve Thorlakson said Wednesday.

"The UBCM would say that Dan Miller should be telling these people, 'We want you to get back to work and get this railroad running,'" said Thorlakson, who is also mayor of the northeastern B.C. community of Fort St. John.

He said Miller should promise both sides a "reasonable period of time" to resolve the dispute before the province intervenes.

Northern mayors and leaders in British Columbia's resource sector are alarmed about the situation at BC Rail, where management locked out workers this week in advance of a threatened strike.

"When you get into critical transportation networks, you just can't afford to hold the province to ransom," Thorlakson said. "That's what both sides in this dispute are doing."

BC Rail's 1,573-kilometre main line is a crucial route for funneling such commodities as wood and coal from rural B.C. to markets and shipping facilities in the south.

As the rail system sits idle, industrial leaders are speaking of stockpiling goods until the dispute ends.

That's the plan for Canadian Forest Products Ltd., which has several operations affected by the dispute.

"It's obviously not helpful that they have broken off talks," said company official Susan Yurkovich.

Miller has not yet made any comment on the situation, but an official in his office said Wednesday it appeared some progress was made before the talks broke down.

"We remain cautiously optimistic the parties will talk again and bring [the dispute] to a settlement," the official said.

Both sides tried to resolve their differences Tuesday with the aid of provincial mediator Irene Holden, who shuttled between two offices across the hall from each other in a downtown skyscraper where the parties were camped.

The Council of Trade Unions on BC Rail alleged that BC Rail CEO Paul McElligott vetoed carefully negotiated proposals just before midnight Tuesday.

Bill Tieleman, speaking for the seven unions that are members of the council, called on Miller to step into the dispute.

"He should get [McElligott] on the phone and tell him to stop fooling around," Tieleman said.

The union allegation drew an outraged response from BC Rail spokesman Alan Dever, who said the unions had no way of knowing what was going on in the BC Rail room because they were in another room.

"He [McElligott did not veto anything," Dever said.

Dever countered the union allegations by suggesting it was the unions' rejection of the proposals that prompted the breakdown of talks.

But Dever also said both sides tried hard to come up with a deal.

The sticking points are agreements that would allow BC Rail to boost productivity while allowing the union to meet its goals, he said.

Management is offering a two-per-cent wage increase over three years, but is looking for concessions to pay for it, Dever said.

However, Tieleman suggested management wants a 20-per-cent cut in the unionized payroll over the course of the contract, a two-tier wage structure, and longer hours for some crews.

Last month, BC Rail's unions voted 84 per cent in favour of job action in a strike vote.

Holden said after her failed mediation bid that no future negotiations are scheduled and the Labour Relations Board plans no further initiatives.

"I'm not sure where it's going to go," she said.

Holden declined to be specific about what went wrong in the talks and said she thought they were "going fairly well" before their collapse.

"There are peaks and valleys in any dispute," she said.

BC Rail is primarily a freight service, although it also carries up to 70,000 passengers per year.

The labour dispute has forced the cancellation of several trains, affecting 1,100 passengers.

Rail lockout may force B.C. layoffs

VANCOUVER -- BC Rail Ltd.'s customers warned yesterday that they may be forced to lay off employees after mediated talks aimed at ending the three-day lockout at the Crown corporation broke down and no resumption of discussions was scheduled, the Toronto Globe and Mail reported today.

And despite the risk of the shutdown to British Columbia's precarious resource-based economy, the province, the sole owner of the railway, still refuses to intervene.

Vancouver-based mining company Teck Corp. says it may have to lay off some of the 750 employees at its Quintette and Bullmoose coal operations in the northeastern B.C. town of Tumbler Ridge if the lockout is protracted. Mike Lipkewich, senior vice-president of operations, said the company has few alternatives to rail. "Trucks are not an option," he added. "They would be too expensive to ship to the Port of Prince Rupert," about 1,000 kilometers away from those operations.

Ike Barber, chief executive officer of Slocan Forest Products Inc. in the Vancouver suburb of Richmond, said he is assessing whether layoffs would be needed at his northeastern British Columbia plants.

Slocan's northernmost operations, a pulp mill in Fort St. John and oriented strandboard (OSB) and plywood mills in Fort Nelson, are the most vulnerable because trucks are so costly to use in that region.

The OSB plant ships up to nine cars of product a day on BC Rail lines, and Mr. Barber said there is a limited time that the company can stockpile goods.

Daylong discussions Tuesday between the company and the Council of Trade Unions, which represents seven railway unions, ended shortly before midnight. The council accused BC Rail chief executive officer Paul McElligott of vetoing a tentative proposal his bargaining team had earlier reached with the unions.

"We were quite convinced we had an agreement that would address the issues the railway was concerned about," Robert Sharpe, chairman of the Council of Trade Unions, told reporters yesterday. "At the 11th hour, the railway got Mr. McElligott on the phone. All the work we'd done all day long completely dissolved after [he] got involved in this."

BC Rail spokesman Alan Dever "denies categorically" that the railway boss vetoed anything. He said the talks ended because "the union didn't see fit to accept any of our proposals. We put forward proposals for productivity improvements and the council rejected them." He said that if the company is going to provide a 2-per-cent wage increase, it must find savings to compensate for that boost.

The B.C. Federation of Labour, which represents 450,000 unionized workers in B.C., has now stepped in to co-ordinate picketing of the entire railway and to pressure the government to step in. "We must send a message that this has to be solved," said federation president Jim Sinclair.

The unions have accepted provincial wage increase guidelines of 2 per cent in the final year of a three-year contract, which would be their first wage increase in five years. In return, the company had wanted to eliminate 20 per cent of the unionized work force, a proposal that has the union concerned about the impact on workers, customer service and railway safety. The company has also asked for a two-tiered wage structure that would see new hires receive a lower wage than their lowest-paid counterparts until they have worked a certain number of hours.

Council chairman Mr. Sharpe said the lockout is totally unnecessary. "There's very serious damage being done to the province now. It can't be over a 2-per-cent wage increase. The railway's losing more than that every day it's shut down." He estimated losses to be at $1-million a day.

A government source said there are no plans to get involved. He accused the unions of politicizing the dispute by putting pressure not on management but on the government.

Meanwhile, shippers fear their buyers are seeing B.C.'s reputation for reliability worsening and say they are taking their business elsewhere