We have reached a tentative agreement that will provide wage increases in 2005 and 2006 and confirms an end to the wage rollback that we endured in 2005.

We are recommending acceptance of this agreement.

? It provides for a 2 per cent raise effective Dec. 31, 2005. An additional 2 per cent will take effect Dec. 31, 2006, at the latest (more on that below).

? The rollback ends on schedule Dec. 31, 2005, which means employees will see their paycheques increase a real 4 per cent going into 2006.

? All full-time employees on staff as of Dec. 31, 2005, shall get an additional two floating holidays with pay in 2006, as recognition of the contribution they made in 2005.

We believe this agreement recognizes the improving financial strength of CP, the needs of employees not to see wage rates fall further behind other media workers in Canada and the continued strain caused by special CP pension payments.

Because there is a possibility those payments could be reduced in 2006, we have negotiated a way to ensure employees share in that, if it happens. The 2 per cent increase at the end of 2006 would become retroactive to the date payments are reduced.

This deal means we have extended the collective agreement to Dec. 31, 2006, at which time we will negotiate a new contract for 2007 and beyond.

We recognize that the annual two per cent increases we have negotiated are still not going to close some of the ground we have lost to employees at many of the newspapers which own CP. Management also recognizes this fact and it will be an issue when we negotiate an agreement in 2007.

The memorandum of agreement and details of the ratification process will follow next week.

Your bargaining committee
Scott Edmonds
Karine Fortin
James Stevenson
Kathy Viner