As a strike by Canada’s largest public sector union drags on, experts say Canadians should expect more and more labour unrest this year as workers use the sudden leverage to claw back the inflationary hit they took in the pandemic.
Last week, more than 150,000 civil servants represented by the Public Service Alliance of Canada (PSAC) walked off the job, slowing government services ranging from immigration, citizenship, passport, licensing and tax services to a glacial pace.
After meeting in the middle on hundreds of lesser issues, the two sides remain far apart on the major issue that tends to bog down most labour disputes: compensation.
It’s a major sticking point. The federal government has offered a nine per cent raise spread out over three years, a move that negotiators say would add $6,250 to the pocket of the average worker.
The union, meanwhile, says the majority of its members make less than $70,000 a year, and is requesting a 13.5 per cent raise over the same time period. PSAC workers have been working without a contract since 2021, and the union says the cost of living in that time frame has risen by more than the pay bumps they’re asking for.
Crofton Steers is among those who thinks the union’s demands are fair. A communications manager with the federal government, the Ottawa resident says his family is in the same inflationary boat as everyone else, and the amount of money he has available to pay his bills every month has declined since the pandemic, even as the size of the bills has increased.
“We’re not looking for a big increase in salary, we’re just looking to keep pace,” he told CBC News in an interview. “My grocery bill goes up [but] I have the 2019 amount of money to pay for it, and … you start feeling that it’s death by 1,000 cuts.”
After plummeting in the early days of the pandemic due to reduced demand for goods and services, inflation came roaring back starting in 2021, peaking at more than eight per cent last summer.
Policy makers at the Bank of Canada quickly hiked interest rates to slay the inflationary dragon, and with the rate having fallen by almost half from its peak, that strategy appears to be working.
Wage gains could reignite inflation
As recently as last week, however, central bank governor Tiff Macklem was warning that the battle isn’t over, and urging restraint on demands for wage gains that threaten to bake-in inflation to come.
But that request isn’t resonating with workers like Steers and many more, who say its unfair to ask working people to sit there and watch inflation eat away their spending power.
“If our salaries do not go up to meet the price increase, then it’s essentially a pay cut,” he said.
And he isn’t the only worker who thinks that way.
Across the country and in various industries, more and more labour disputes are looming with compensation disputes at their heart. From Vancouver Symphony Orchestra stagehands to nurses in Ontario, and from WestJet pilots to flight attendants at that airline and others, it’s a sentiment echoed by workers across the country right now.
Larry Savage, a professor of labour studies at Brock University in St. Catharines, Ont., says the current era of high inflation has emboldened workers to seek solutions for problems that predated the sea change to working life that COVID-19 brought about.
“The pandemic really stirred a lot of resentment and anger amongst workers who were expected to do more and to really sort of rally round,” he told CBC News in an interview. “With inflation increasing, more and more workers are willing to go out on strike in order to press their demands.”
Union confidence in pushing for job actions typically come at a time when the job market is tight, Savage notes, and that’s certainly an apt description of the situation right now, as Canada’s official jobless rate currently sits at five per cent, barely above the all-time low of 4.9 per cent set last summer.
Instead of trying to shed excess workers, in the aggregate there’s a war for talent right now, with many employers reporting they can’t find enough staff to meet their demand.
That’s an ideal scenario for workers to fight for concessions, and unions are doing exactly that, Savage says — and not only for their own benefit.
“If these workers are able to win their bargaining demands, I think we’ll see similar demands from public servants at the provincial and the municipal level and in the private sector as well,” he said. “Whenever a union has a win at the bargaining table, that’s contagious.”
Doug Porter, an economist with Bank of Montreal, says all eyes are on the PSAC dispute right now, because the outcome is likely to impact a slew of other negotiations down the line.
“The very public wage negotiations come at an incredibly delicate time for the inflation backdrop, potentially setting the tone for a vast array of settlements elsewhere,” he said in a note to clients last week. “A wave of wage settlements in the zone of four per cent or higher across the economy … could put a hard floor under inflation and make the Bank of Canada’s job of getting back to target that much more difficult.”
Steers says he’s aware of the optics that he and his co-workers are paid by taxpayer dollars, “but I am confident that this labour action is going to lead to positive results for all Canadian workers, and not just us,” he said.
He’s nonetheless stoic in his resolve to help set what he calls “a benchmark” that hard-hit workers in every sector can point to, to try to push back at the bite that inflation took out of household budgets.
“We’re the biggest employer in the country with the biggest group negotiating. If we can’t get our pay raise to at least match the consumer price increase and the inflation rate rise, then what hope does anybody else have?”