By David Ljunggren and Susan Taylor
OTTAWA/TORONTO, Oct 15 (Reuters) - Canada's government is closely monitoring a dispute between the railroad workers' union and Canadian National Railway Co and wants both sides to continue talking, a spokeswoman for Labour Minister Kellie Leitch said on Tuesday.
The railway says talks will resume on Oct. 21 with government-appointed mediators, and union spokesman Roland Hackl, a member of the bargaining team, said the union hoped to reach a deal "without a labor disruption."
The Teamsters Canada Rail Conference union said on Monday that talks had broken down, raising the possibility of a strike or lockout at the country's largest railroad operator after a deadline expires at one minute after midnight on Oct. 29.
The union, which represents some 3,300 conductors, trainmen, yardmen and traffic coordinators, said CN rejected its offer to extend conciliation talks that ended on Oct. 7.
The union says talks stalled over CN demands for concessions that would force workers to work longer hours with less rest time between trips. Hackl told Reuters that the Montreal-based railway wants to increase the hours that some conductors can be required to work to 12 from 10 hours per tour, and wages and the retirement plan are not central issues.
CN spokesman Mark Hallman said none its bargaining proposals would compromise the health and safety of union members. "CN remains optimistic that it can negotiate an amicable settlement .... to avoid labour disruption in Canada," he said.
Railways move crucial commodities across Canada, including potash, coal, oil and a 2014 Western Canadian grain crop that 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."
The Canadian government has intervened several times in recent years to force striking unionized rail and airline workers back on the job. In May 2012 Ottawa passed legislation that ended a strike at Canadian Pacific Railway Ltd, CN Rail's main domestic rival.
Leitch's spokeswoman did not respond to a question about whether Ottawa would be prepared to intervene if CN Rail workers went on strike.