(Reuters) - Teamsters Canada, Canadian National Railway ( CNI ) and Canadian Pacific Kansas City ( CP ) have agreed to restart stalled contract negotiations along with federal mediators, Minister of Labor Steven MacKinnon said on Monday.

"The meetings were frank, constructive discussions that reflected the gravity of the situation before Canada's railways, workforce and entire economy," MacKinnon said in a statement, posted on X, after a discussion with the leadership of the union and the rail companies.

The goal of the meeting was to discuss increasing the pace and frequency of discussions at both companies, which had slowed down after the federal government temporarily suspended workers' right to strike, Teamsters Canada said in a separate statement.

All parties would meet again on Wednesday in Montreal and Calgary, the union added.

In May, workers represented by the Teamsters union had voted overwhelmingly to strike.

"A work stoppage can be avoided, provided both companies are willing to return with fair and equitable proposals," Teamsters Canada said.

Canada relies heavily on its extensive railway network, given its expansive geography and significant exports such as grain, potash and coal.