Subject: Material Change in Working Conditions
 
Dear Sirs:
 
Please be advised that the Company will implement a material Change which will have materially adverse effects on CAW 110 and UTU represented employees at various locations.
 
This operational change is a result of the integration of operations between the former BC Rail and CN.
 
The Company plans to reduce road freight service on the prince George to North Vancouver corridor from the present three trains per day to one train per day.
 
This reduction in freight service will have a collateral effect upon road, yard, and spare board assignments.
 
Pursuant to Article 23.1.1 of the CAW 110 Collective Agreement on behalf of Locomotive Engineers, and Article 132(1)(a) of the UTU Collective Agreement on behalf of Road Train Conductors, Trainmen, Brakemen, Train Baggagemen, Yardmen, Switch Tenders, and Yardmasters, please accept this letter as a notice of a material change in working conditions.
 
Based on today's operation the effect of this change will be as follows:
 
Freight Service
 
The present method of operating directional through freigh trains on the Prince George to North Vancouver corridor to an away from home terminal, laying over, and subsequently being called to operate a train back to the home terminal well be discontinued.
 
In future, Road Switchers will handle traffic from home terminals to intermediate stations, meet and exchange with opposing trains, and return to their home terminal in a continuous tour of duty.
 
In this manner, crews will be scheduled to consistently go off duty at their home terminal following each tour.
 
Notwithstanding this arrangement, the Company reserves the right to operate through freight service under the provisions of the collective agreement.
 
This method of operation will require operation changes inasmuch as fewer crews will be handling fewer trains, and crews will be scheduled to operate in both directions out of some terminals.
 
As example the present NVPG will be abolished and NV based Road Switchers will no longer originate at North Vancouver, but at Squamish.
 
Road Switchers will be established and replace existing through freight operations in the following numbers at the following locations:

• Squamish - 3 assignments to operate North and South;
   
  
• Lillooet - 3 assignments to operate North and South;
   
  
• Williams Lake - 3 assignments to operate North and South;
   
  
• 1 assignment to operate from Exeter;
   
  
• Prince George - 1 assignment to operate South.

Yard Service
 
The number of Yard assignments required at any location is directly related to customer requirements and reduced through freight operations.
 
Yard assignments will be established as follows:

• North Vancouver - 4 assignments;
   
  
• Williams Lake - 2 assignments;
   
  
• Quesnel - 2 assignments.

Staffing Requirements
 
The following table details the existing complement of employees, the futrue staffing requirements and the number of excess positions which will be materially affected by this change.

It should be noted that the above numbers of employees at these locations also include those redundant positions identified in the Material Change notice dates 27 Jul 2004.
 
These figures are considered accurate at this point in time, however more current detail will be provided at the time of our negotiations.
 
The Railway is prepared to meet with the Union to fully discuss the impact of the changes and to discuss measures to minimize the adverse effect of these changes in accordance with Ariticle 23.1.2 and Article 132(1)(b) of the current Collective Agreements.
 
Yours truly,
 
Dave Edison - Vice-President Corporate.