TORONTO _ While the union representing customer service and other employees at Via Rail readies itself for a strike, the railway company says it is prepared to keep negotiating until the midnight deadline.

``We remain hopeful,'' said Via Rail spokeswoman Mylene Belanger on Thursday.

``Frankly, we don't understand why there should be a work stoppage. We are prepared to keep talking. We offered a fair and reasonable offer to the Canadian Auto Workers.''

Via Rail presented its latest proposal on Wednesday, offering wage increases of two per cent a year over three years.

But the Canadian Auto Workers Union said the offer is nowhere near good enough and a strike is unavoidable. The CAW represents about 2,000 customer service, on-board service and maintenance workers at the railway.

``There's no chance to reach an agreement by the deadline,'' said Bob Orr, assistant to the president of the Canadian Auto Workers Union.

Via Rail is attempting to circumvent the bargaining table by communicating directly with employees, rather then through the union, Orr said.

``We're sitting in a hotel and we're reading about what they're saying to the membership,'' he added.

``This just doesn't happen, bargaining is supposed to be between the two parties at the table.''

Under the latest offer, its members would take home less money because the federal Crown corporation has proposed higher pension contributions, the union said.

The CAW also objects to plans that would slash pension benefits for new Via employees and the rolling back of income protections for seasonal workers.

However, Via said its employees need to contribute more to the pension because it currently faces a $419 million deficit and the government-owned company has an obligation to taxpayers.

``We feel this is a fair and reasonable offer,'' said Via president and chief executive Marc Laliberte in a statement.

``This offer, in particular the parts related to pensions, will help ensure the sustainability of both our company and the pension plans, and that's in the long-term best interests of our employees.''

In the event of a strike, management will continue to offer basic railway services, including daily trips in the morning and at the end of the day on the Quebec City to Windsor, Ont., corridor.

Long-distance trips and service to remote locations will be provided once a week.

The two sides have been in talks since the fall of 2012 and are currently in the process of mediation.

A strike deadline of 12:01 a.m. on Friday has been set.