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While a months-long labor dispute between Canadian National Railway Co. and the United Transportation Union-Canada has made its way into the hands of a federal arbitrator, another Canadian Class I/rail labor union squabble is about to enter the strike phase.

The Teamsters Canada Rail Conference’s Maintenance of Way Employees Division plans to issue a strike against Canadian Pacific Railway at midnight tomorrow MST because the parties have been unable to negotiate an agreement on wage increases, benefit improvements and work rules.

The previous contract covering the 3,200 CPR track, bridge and structure maintenance workers expired on Dec. 31. The parties have been bargaining a new contract since July 2006.

“We are asking for a 4 percent wage increase for 2007 [and] the company is standing firm at 3 percent,” said division President William Brehl in a prepared statement. “The national average presently for wage increases on contracts settled in 2007 is at 3.4 percent and rising.”

The railroad has presented an offer calling for wage increases of 3 percent, 4 percent and 3 percent over a three-year term, which is consistent with agreements ratified by other unions, according to a CPR statement. The division recently increased its wage proposals from 12 percent to 13 percent over the three years, CPR said, adding that its offer also included pension and benefit improvements.

Although both parties are open to further negotiations, no bargaining talks are scheduled.

CPR plans to maintain most MOW operations if the strike occurs. The railroad has trained more than 1,300 management employees to replace about 1,200 maintenance workers. Other MOW employees associated with capital projects won’t be replaced because the projects will be deferred, CPR said.