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(Adds further comments from the railway companies, comments from the grain organization and the Minister of Transport)

By Rod Nickel and David Ljunggren

WINNIPEG, Manitoba, May 1 (Reuters) – Thousands of Canadian National (CN) and Canadian Pacific Railway workers in Kansas City (CPKC) have voted overwhelmingly in favor of a strike starting May 22, the union announced on Wednesday.

Railways are essential to Canada’s economy, due to its vast geography and its exports of grain, potash and coal.

Contracts for CN and CPKC locomotive engineers, conductors and yard workers expire on December 1. On January 31, 2023, the Teamsters Canada Rail Conference renegotiates a third agreement covering CPKC rail traffic controllers.

The three worker groups, numbering 9,300 workers, each voted by more than 95% to authorize a strike.

The parties have made no progress in six months of negotiations, said Teamsters Canada president Paul Boucher, adding that the companies were trying to remove rest provisions that were critical to safety.

CN said in a statement that the union opposed moving toward a more modern contract based on an hourly rate and schedule changes and instead focused on 200 local and regional demands.

The CPKC said the parties remain distant from each other and are now entering a mandatory 21-day federal mediation period. The company’s rest proposals do not compromise safety and comply with Canadian regulations, the CPKC said.

The potential strike is unique in that it would involve the two major railroads, grinding bulk grain transportation to a near-stop, said Wade Sobkowich, executive director of the Western Grain Elevator Association, which represents grain handlers, including Cargill and Richardson International.

“There is no Plan B because, as we have been saying for decades, there are no competitive alternatives,” Sobkowich said.

Grain sales typically slow down a few weeks before a rail shutdown as shippers and exporters try to minimize costs related to vessel wait times and contract penalties, Sobkowich said.

Canada is a major exporter of wheat and canola.

Transport Minister Pablo Rodriguez said the government was concerned about the potential impact of a strike on the supply chain and urged the parties to negotiate in good faith. (Reporting by Rod Nickel in Winnipeg, Manitoba and David Ljunggren in Ottawa; editing by Kirsten Donovan and Mark Potter)