The Canadian government has denied an arbitration request by Canadian National Railway Co., increasing the likelihood of a nationwide work stoppage by thousands of its unionized workers. 

Labor Minister Steven MacKinnon told the railway and the union, Teamsters Canada Rail Conference, they have a “shared responsibility” to try to negotiate a new contract, according to his letter sent to the company’s representative.

He essentially rejected the rail company’s call to use the ministerial powers to avert a potential job action that may begin as early as next week. 

“Teamsters Canada agrees with Minister MacKinnon: agreements are within reach at the bargaining table,” the union said in a statement. “It bears repeating that the main sticking points at the bargaining table are company demands, not union proposals.”

Canadian National has already begun a phased shutdown of its rail networks, beginning with shipments of hazardous materials ahead of the expected work stoppage.

The Montreal-based rail company said the union “has rejected all offers and has not proposed a single counteroffer.”

Canadian Pacific Kansas City Ltd., which has so far failed to reach an agreement with the same union, has also halted shipments of toxic goods and temperature-controlled products such as vegetables, according to a document sent to its customers.

“All stakeholders want an end to this needless uncertainty as rapidly as possible so that we can continue serving the North American economy,” Canadian Pacific said in a statement.

Both companies said their gradual shutdown would ensure hazardous and vulnerable shipments aren’t stranded if a settlement isn’t reached by August 22. They’ve said they will lock the workers out if there’s no agreement by then.