Teamsters Canada Rail Conference

VANCOUVER, B.C. — Labour negotiations resumed Monday to try to avert a possible strike that could halt millions of dollars worth of imports and exports that flow through British Columbia's ports.

About 450 ship and dock foremen, members of the International Longshore and Warehouse Union (ILWU), Local 514, could go on strike as early as Friday.

If they do strike, about 5,000 other port workers are expected to walk off the job to support them.

The union is negotiating with the British Columbia Maritime Employers Association, or BCMEA, and two federally appointed mediators.

"There is significant work to be done," Stephen Brown, president of the Chamber of Shipping of British Columbia, said Monday.

B.C. ports handle everything from grain and coal to lumber, chemicals, fertilizer and other resources destined for the Far East, California and other markets. They also transfer shipments of electronics, manufactured goods, machinery and other imports from Asia to Canadian and U.S. markets.

Canada's two main railways - Montreal-based Canadian National (TSX:CNR) and Calgary-based CP Rail (TSX:CP) - have major operations to the west coast ports.

CN said in a statement emailed to The Canadian Press that the rail giant is watching the labour negotiations closely "and remains hopeful that a settlement can be reached without disrupting rail operations to west coast B.C. ports."

Brown said some shipping companies have already started diverting cargo to other ports in anticipation of a strike.

"Those people who require reliability have diverted cargo to other ports, particularly on the container side of the business .... purely as a precaution," Brown said.

He said ports in Washington state in particular are reporting an increase in cargo that would have otherwise gone through B.C. ports.

Brown said the implication of a strike is widespread, and comes at a time when the economy is already in a recession.

"Any disruption of any of the gateways is serious, not just for the west coast, but for the country," Brown said.

He said the strike would impact every job on the waterfront "from the export of Canada's commodities overseas to the import of essential goods coming in."

Brown said he is still hoping a settlement can be reached before the strike deadline.

ILWU Canada president Tom Dufresne said the two sides are back bargaining, but cited a "press blackout" when asked for details of what is on the table and how the negotiations are proceeding.

The Local 514 workers have been without a contract since March 2007.

The two sides, which last met on Dec. 20, are said to be far apart on a number of issues, which reportedly include pension payments and working conditions.

If there is a strike, only grain shipments would be guaranteed because they are protected by federal law. Specialty crops that move by containers are not covered by the law.

In the past, striking workers have been legislated back to work. However, with Canada's parliament temporarily suspended, this type of legislation cannot be passed until at least Jan. 27, when parliament is scheduled to resume.

A strike by longshoremen in 2005 cost the provincial economy tens of millions of dollars a day, according to figures from the B.C. government.

Port Metro Vancouver president and CEO Gordon Houston said he is "deeply concerned" about the impact of a labour disruption.

In a letter recent letter to federal labour minister Rona Ambrose, Houston said a strike would "significantly impact most of Canada's west coast supply chains at a critical time in our economic history."

He said about $200 million in cargo passes through Port Metro Vancouver every day, and that port operations and businesses generate $10.5 billion in gross domestic product and $20 billion in economic output each year.

He also said the port impacts about 129,500 jobs that earn $6.1 billion in wages across Canada.

"Labour disruptions of this magnitude would jeopardize the financial future of Canadian exporters and importers who already face significant pressures due to the current credit crisis and global economic uncertainties," Houston wrote in a letter dated Dec. 19.

"Faced with possible labour disruptions, Canadian exporters may be unable to find alternative gateways jeopardizing both their contractual obligations and business reputation ... . The resulting impacts to over 53,000 direct jobs that support Port operations would be considerable."

In Monday trading on the TSX, CP Rail shares rose 32 cents to close at $39.20, while CN Rail dropped one cent to $42.33.