* Talks break down between Teamsters, CP Rail
* Labor minister doesn't say when back-to-work bill might arrive
* Industry urges government to step in to end strike
TORONTO, May 27 (Reuters) - Talks between Canadian Pacific Railway Ltd and the union representing 4,800 striking locomotive engineers have broken down, paving the way for the Canadian government to bring in back-to-work legislation, the company said on Sunday.
"The mediator has withdrawn. The legislative process will now commence," CP Rail spokesman Ed Greenberg said by email.
The Canadian government, concerned that a rail strike could have a negative impact on an economy that is still recovering from recession, has said it is prepared to introduce legislation that would force the strikers back to work.
The back-to-work bill has yet to be formally introduced in Parliament. If the government speeds it through the legislative process, it could become law this week.
Members of the Teamsters Canada Rail Conference walked off the job May 23 after talks over pension issues broke down, shutting down freight traffic across the country.
The union was not immediately available to comment on Sunday's news, but a message on its Twitter account, @TeamstersCanada, said mediators were no longer involved in its discussions with CP, and no further talks were planned.
The majority Conservative government previously used back-to-work legislation to end strikes at Air Canada and at the Canada Post mail services.
Labor Minister Lisa Raitt, who has said the CP strike could cost C$540 million ($524.9 million) in lost economic activity each week, said on Sunday that the government was consulting with businesses to see how deeply the strike was hampering their operations.
She did not say when the back-to-work legislation might land.
Companies across a range of industries have scrambled to find alternative ways to ship their grain, coal, fertilizer, autos and other goods as CP trains sat idle.
One industry group, Canadian Manufacturers & Exporters, called on Sunday for the federal government to immediately intervene to end the dispute.
"Over the past week, we've heard directly from members, large and small, from all sectors of the economy, who have indicated the labor disruption at CP is having a significant impact," it said in a statement.
CP is Canada's second largest railroad. Its routes are mostly in western Canada and in the United States, although the U.S. operations are not affected by the strike.