Air Canada said late Tuesday that contract talks with the Canadian Union of Public Employees, which represents roughly 10,000 flight attendants at Air Canada and Air Canada Rouge, have reached an impasse after the union rejected the carrier’s proposal for binding third-party arbitration. Under Canada’s labour code, the union can issue a 72-hour strike notice as early as the start of Wednesday, paving the way for a work stoppage at 12:01 a.m. ET on Aug. 16 that could ground most mainline and Rouge flights. The airline disclosed that its latest offer would lift overall compensation by 38 % over four years, including a 25 % jump in the first year, and would begin paying crew for some duties performed on the ground. CUPE countered that the proposal would lift base wages by only 17.2 % over the term and still leave many hours unpaid, calling instead for a negotiated settlement rather than arbitration. Facing the prospect of peak-season disruptions, Air Canada has asked Ottawa to order binding interest arbitration, a step permitted when labour disputes threaten significant economic harm. Jobs and Families Minister Patty Hajdu said she has met both parties, is “closely monitoring” the talks and will keep federal mediators at the table until a deal is reached. A strike would affect up to 130,000 daily passengers. Air Canada said it is arranging contingency agreements with other Canadian and foreign carriers but warned that widespread flight cancellations remain possible if no agreement is secured before Saturday.