The U.S. and Canadian Chambers of Commerce urged Ottawa on Friday to take “swift action” to avoid a shutdown of Air Canada, with labour negotiations between the carrier and its more than 5,000 pilots still at an impasse—and a hard deadline approaching.

If Canada’s biggest airline fails to reach an agreement with the Air Line Pilots Association (ALPA) by 12:01 a.m. Sunday, the union could order a 72-hour strike notice that, barring a last-minute deal, would trigger a complete shutdown of Air Canada’s operations as early as Wednesday.

Such an outcome seemed more likely after Prime Minister Justin Trudeau told reporters on Friday afternoon the government would not intervene to avoid a work stoppage.

“We are not going to take action before it really becomes very clear that there is no goodwill at the negotiating table,” Trudeau said.

A shutdown would severely restrict passenger travel options and would cost the Canadian economy as much as $1.4 billion if it persisted for two weeks, according to Desjardins analysts. 

Concern in the business community is mounting: the Ottawa-based Business Council of Canada joined the U.S. and Canadian chambers’ calls for intervention, while the Canadian Federation of Independent Business warned a lockout would be “devastating” for companies. 

For the ruling Liberals, the looming strike also presents a sticky political situation, as a work stoppage could be difficult to address through traditional legislative means. 

Where things stand: Talks continued on Friday, after Labour Minister Steven MacKinnon met with Air Canada and ALPA in Toronto alongside federal government mediators. The airline said it hadn’t yet cancelled any flights. But in a rare move on Thursday, it suggested federal officials “be prepared to intervene if talks fail.” 

Air Canada and its pilots have been in disagreement over salaries, with ALPA calling for pay parity with their counterparts in the U.S. Last year, Delta Air Lines agreed to pay pilots 34 per cent more over three years, while United Airlines is raising pilot wages 40 per cent over four years under its latest deal. 

Air Canada has described the union’s wage demands as “excessive,” saying that earlier in negotiations it had offered pilots an “unprecedented” 30 per cent pay hike and other concessions. 

The airline did not immediately respond to The Logic’s questions on Friday, while the ALPA provided a brief statement noting it remained in discussions with the company.

A matter of confidence: In past disputes, governments have introduced legislation compelling employers to end lockouts or forcing workers back onto the job. Successive governments have done so more than 30 times since the 1950s, according to Ian Lee, a professor at Carleton University’s Sprott School of Business. 

But presenting such a bill would pose a risk to the minority Liberal government if no other parties supported it. Conservative Leader Pierre Poilievre has sided with the pilots in the dispute (and would therefore likely not support back-to-work legislation), while the NDP broke from its long-standing confidence-and-supply agreement with the Liberals earlier this month.

The back-to-work workaround: Marc Boudreau, a partner at Montreal-based law firm Marceau & Boudreau, said the government may opt to avoid Parliament altogether, just as they did last month when they ordered an end to the rail strike. 

In that case, the minister called upon the Canada Industrial Relations Board, an independent tribunal, to force Canada’s railways into a deal with union representatives. Air Canada is asking the government to do the same in this case.

While he acknowledged the move was successful, Broudreau warned that it set a “dangerous precedent” in undermining workers’ charter right to strike. 

Please mind the economy: If last-ditch talks fail to produce a settlement, Ottawa will face enormous pressure to avoid or end a shutdown due to its economic toll.

In a statement on Thursday, Air Canada said a lockout would “affect the travel of 110,000 people a day and ground tonnes of essential air cargo.” 

Still, the economic impact pales in comparison to the one threatened last month had Canada’s two railways ceased operations. Desjardins analysts estimate an Air Canada shutdown would cost the economy $98 million per day. According to the Canadian Chamber of Commerce, a shutdown of both rail companies would’ve stranded $550 million per day worth of manufactured goods alone. 

Editor’s note: This story has been updated to clarify the challenges the Liberal government would face if it tried to legislate an end to a work stoppage