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* Labor minister says talks outlook clearer by midnight

* Raitt doesn’t say when back-to-work bill might land

* Canadian gov’t also listening to industries hit by strike

By Jeffrey Hodgson

TORONTO, May 27 (Reuters) – Talks between Canadian Pacific

Railway Ltd and the union representing 4,800 striking

locomotive engineers and conductors have become more difficult,

though the government has not given up hope of a deal, Canada’s

labor minister said on Sunday.

Members of the Teamsters Canada Rail Conference walked off

the job May 23 after talks broke down on pension issues,

shutting down freight traffic across the country.

“As it becomes more and more apparent the effects on CP, the

company, of the strike, things are getting more difficult at the

table,” Labor Minister Lisa Raitt said in an interview with

CTV’s “Question Period.”

“Now they’re looking at the availability of finding their

own process and still being masters of their own destiny.”

Raitt, who previously estimated the strike could cost C$540

million ($524.9 million) in economic activity each week, warned

the government would step in to protect the economy, if

necessary.

The majority Conservative government previously used

back-to-work legislation to end strikes at Air Canada

and Canada Post.

But the labor minister did not say in the interview when the

Conservative government might introduce such legislation, noting

a deal was still possible.

“I’m still hopeful. I’m going to be speaking with the

parties today. I’m going to be speaking with my officials

today,” she said.

Raitt said the government was consulting with businesses to

see how deeply the strike was hampering their operations.

Companies across a range of industries have scrambled to find

alternatives to ship their grain, coal, fertilizer, autos and

other goods as CP trains sat idle.

One industry group, Canadian Manufacturers & Exporters,

called on Sunday for the federal government to immediately

intervene to end the dispute.

“Over the past week, we’ve heard directly from members,

large and small, from all sectors of the economy, who have

indicated the labor disruption at CP is having a significant

impact,” it said in a statement.