By Anna Mehler Paperny

(Reuters) -A planned strike by thousands of Canadian border workers was put on hold on Friday to give more time for mediation in negotiations with their employer, the federal government, the Public Service Alliance of Canada (PSAC) union said.

Mediation is scheduled to continue until Wednesday, PSAC said just ahead of Friday afternoon’s strike deadline.

The government is pleased the union is staying at the bargaining table, Canada’s Treasury Board said in a statement late Friday afternoon.

“To date, discussions have been productive, and we remain committed to reaching an agreement that is fair and reasonable for members of the Border Services Group as quickly as possible,” it said.

The U.S. is Canada’s biggest trading partner, with an average of C$3.6 billion ($2.62 billion) worth of goods and services crossing the border in both directions combined in 2023, according to the Canadian Chamber of Commerce.

About 4,870 of the Canada Border Services Agency (CBSA) 5,400 frontline officers are designated essential, meaning they cannot legally stop working, an agency spokesperson said.

But experts said the wide discretion border officers have to stop, question and search travelers could slow down border traffic significantly at airports and land crossings.

That could hit sectors ranging from the automotive industry, which relies on a just-in-time supply chain, to the food industry, which deals in perishable goods, said Fraser Johnson, a business professor at Western University.

“If you’re trying to ship lettuce into Canada (and) you get held up at the border, it has a shelf life. It becomes problematic,” he said.

“It’s not that the border is going to be shut down. (Goods are) just not going to get through as quickly.”

The Canadian Manufacturers and Exporters association said it fears potential business disruptions.

“Extended delays will disrupt operations and production schedules, harming manufacturers, and their workers,” President Dennis Darby said.

Last year, a strike upended operations at Canadian west-coast ports. There are also potential labor stoppages by Canada’s rail workers and at the Port of Montreal, Darby said.

“Manufacturers kind of treat the (Canada-U.S.) border as if it isn’t there, so anything that happens to disrupt that, it starts to affect production,” he said.

Two options for the government, said Carleton University associate professor of management Ian Lee, are binding arbitration or, as a last resort, back-to-work legislation.

Sticking points between the workers and government include wages, remote work, retirement benefits and workplace protections, according to PSAC.

(Reporting by Anna Mehler Paperny in Toronto; Editing by Leslie Adler, Rod Nickel and David Gregorio)

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