Canada's government is closely monitoring a dispute between the railroad workers' union and Canadian National Railway Co and is urging both parties to continue talking, a spokeswoman for Labour Minister Kellie Leitch said on Tuesday.
The union said on Monday that talks had broken down, raising the possibility of a strike or a lockout at the country's largest railroad operator once a union-set Oct. 28 deadline is passed.
Rail shipments move crucial commodities across Canada, including potash, coal and grain. This year's crop output in Western Canada is expected to be one of the largest on record.
"Minister Leitch encourages both parties to continue negotiating and reach a new collective agreement as soon as possible, as the best solution in any dispute is always the one that the parties reach themselves," said the spokeswoman.
"We are monitoring the situation closely."
CN Rail and the union are scheduled to resume collective bargaining on Oct. 21 with government-appointed mediators, said railway spokesman Mark Hallman.
In May 2012 the Canadian government passed legislation forcing an end to a strike at Canadian Pacific Railway Ltd . The spokeswoman did not respond when asked whether Ottawa would be prepared to intervene if CN Rail workers went on strike.