The Montreal-based railway said the lockout of the 4,800 mechanical, intermodal and clerical workers represented by Unifor would begin at 11 p.m. Monday unless the union agreed to binding arbitration to settle contract differences.
The union, which has announced plans to begin a strike vote next week after the failure of five months of talks, quickly rejected the company ultimatum but said it was prepared to negotiate this weekend.
"If they want to lock us out they can lock us out," Unifor president Jerry Dias said in an interview.
CN gave the union 72 hours notice of a lockout and moved to unilaterally impose terms of a new collective agreement Friday that included wage increases of two per cent.
In announcing the planned lockout, CN chief executive Claude Mongeau said the two sides won't get any closer amid a month-long strike mandate process.
CN (TSX:CNR) wants Unifor to focus on terms of a collective agreement that applies to its employees, rather than to match terms of a recent settlement with Canadian Pacific Railway (TSX:CP), which included a number of improvement such as rail safety and working conditions.
"Our complete settlement offers to Unifor...are fair, competitive and fully in line with the amicable contract renewals that we have recently bargained with four other unions at CN, including the Teamsters," Mongeau said in a release.
"They would also maintain Unifor-represented employees working at CN among the highest paid in their trades in the Canadian rail industry."
But Dias said CN is objecting because it wants a cheaper deal than CP obtained.
"They're a huge, huge wealthy Canadian company that's (acting) like a schoolyard bully . . . the tactics just aren't going to work."
"If CN wants to lose their customers because of their own foolishness then I guess they have the right to do that," Dias added.
The railway said Ottawa should stay out of the dispute if both sides agreed to arbitration, which it said has been used many times in the past.
The union said politicians should not "stick their nose" in at all.
Dias said that late on Feb. 15, CN made its "one and only economic offer," which he said did not take into account any of Unifor's concerns.
Union negotiators rejected the offer and CN "abruptly brought negotiations to a halt," he said.
"Now they're locking out our members as of Monday night."
CN said the company would use management personnel during the lockout to provide replacement services "to the best of its ability."
However, the railway said Montreal commuter traffic along the Deux-Montagnes line would be affected because managers don't have the expertise to maintain equipment on the electrified line.
CN has offered to allow the transit operator, AMT, or a qualified contractor access to its shops.