VANCOUVER, British Columbia, Sept. 25 (Reuters) – Canadian Pacific Railway Chief Executive Fred Green says he can't predict when the economy will recover fully and is focused instead on using the downturn as a chance to experiment and prepare for better times.

Canadian Pacific, Canada's second largest railway, is using the recession to try out operating changes, such as running extra-long grain trains, Green said in an interview following an address to the Canadian Maritime Conference in Vancouver.

That's something it would not have been able to do when the economy was stronger and its tracks were operating at full capacity, he said.

It has also sped up plans to overhaul locomotives and freight cars, allowing it to recall some laid off employees the railway says have skills it will need when the economy rebounds and older workers retire.

But Green acknowledged that using the downturn as a window of opportunity can be a difficult sell to some investors who have an eye on only cutting costs and short-term results.

''Our challenge as a company, and every company's challenge, is not to be intimidated by the short-term thinkers on Wall Street,'' Green said.

''If that means you have to go through some rough periods to position these enterprises for long-term success, that's a far better angle than it is to worry about a guy beating you up on a quarter.''

Green said recalling some of its repair-shop and operating crews was a bet on the timing of a recovery in traffic such as potash, and some workers may have to be laid off again if that does not happen.

''In the meantime, we're building an alignment between our interests and our employees' interest. People who we want to be part of our future.''

Green said that while Canadian Pacific is seeing some improvement in traffic levels, he does not expect the traditional autumn spike in freight hauling to be as large as it normally is.

He said Canadian Pacific also wants to take advantage of Canada's relatively stable regulatory environment at a time when its US rivals face uncertainty over plans in Washington for new regulations on the industry.

The drive for tougher US regulations follows complaints from shippers that the consolidation of North America's rail industry has cut competition and given the carriers too much control over the market.

''We (Canada) have been through this battle years ago. We have established regulatory stability. We have established the ability to collaborate among the parties in the supply chain,'' Green said.