Trade unions continue to negotiate intensively – and achieve success – even as inflation slows

Even as inflation continues to ease, Canadian unions are still negotiating with the same intensity as they did in 2022 and 2023, when inflation continued to rise, securing significant wage increases for their members.

Labor market experts say this dynamic at the bargaining table was largely due to unions trying to catch up on the wages of their members whose contracts had not yet expired when the economy experienced rapidly rising prices.

“It's a lagging effect. Unions are still making gains on wages that keep up with inflation,” said Charles Smith, a political science professor at the University of Saskatchewan whose research focuses on the interface between labor and public policy. “I see this as just keeping up with the cost of living instead of moving ahead.”

Government data shows that unions in both the private and public sectors have succeeded in securing above-average wage increases for their workers over the past three years, even if those increases have not kept pace with inflation.

Before 2022, unions traditionally set annual wage increases between 1.5 and 2.5 percent (the pre-pandemic inflation rate), but since 2022 this figure has remained consistently above 3 percent.

According to Employment and Social Development Canada, private sector unions nationwide negotiated annual wage increases of 3.6 percent for their members for two- to three-year contracts in the first half of 2024. For public sector union members, the figure was 3.1 percent.

The average annual wage increases for union members in the private sector were 4.4 percent in 2023 and 3.1 percent in 2022. For union members in the public sector, they were 3.5 percent and 2.5 percent, respectively.

Unionized workers in Ontario's private sector have seen an average annual wage increase of 4.2 per cent so far in 2024, the same as in 2023. However, this increase is not evenly distributed across sectors, with the construction industry seeing significant wage increases.

“Although inflationary pressures are beginning to ease, the collective bargaining agreements currently negotiated by unions are designed to offset recent years in which inflation significantly outpaced wage increases,” said Larry Savage, a professor of labor studies at Brock University. And to back up their demands, Professor Savage said, unions continue to stage strikes.

This year alone, there have been three high-profile strikes across the country. In July, around 10,000 employees of the Liquor Control Board of Ontario went on strike for almost two weeks – the Ontario Public Service Employees Union (OPSEU) succeeded in securing wage increases of 8 percent over three years for LCBO employees.

A strike in July by 680 WestJet mechanics represented by the Airline Mechanics Fraternal Association (AMFA) resulted in a cumulative wage increase of 26 percent over a five-year period.

And just last week, a standoff between the Teamsters Canada Rail Conference and Canada's two largest rail operators resulted in the first lockout of Teamsters workers and a brief strike before the federal labor department ordered binding arbitration and ordered thousands of rail workers back to work.

Nationwide data on the frequency and number of strikes across the country show that there were 74 work stoppages between January and June of this year. The data only includes strikes and lockouts lasting more than 10 days. Last year, there were a whopping 745 work stoppages, more than four times the number of strikes and lockouts Canada typically sees over the course of a year.

The rail strike in particular has highlighted that there are still significant repercussions from the pandemic in terms of worker welfare and treatment, which continue to galvanise unions, says Rafael Gomez, a professor of industrial relations at the University of Toronto.

The biggest points of contention for Canadian rail workers are transfers, rest periods and working hours. The latter two demands raise safety concerns, according to the Teamsters union.

“Many labor-intensive industries like transportation suffered shortages during the pandemic. Demand for these services came back: consumers wanted to travel, but labor shortages persisted, so we will have a situation where workers demand more because they do more,” Gomez said.

Labor unrest could well last into the second half of the year as collective bargaining agreements expire in major unionized industries. Last week, Air Canada AC-T pilots voted overwhelmingly to strike, which could lead to a walkout as early as mid-September. On Sunday, thousands of autoworkers at General Motors' electric vehicle assembly plant in Ingersoll, Ontario, handed Unifor a strong strike mandate ahead of formal talks on Sept. 9.

Adam King, an associate professor of labour studies at the University of Manitoba, told The Globe and Mail that he believes union momentum at the bargaining table will continue in the near future until union members feel they have made up for the real wages lost during years of high inflation.

“Inflation may have eased, but I think workers will remember their own salaries better than their bosses,” he said. “The cost of living for most workers is still high, so they will continue to have incentives to vote for strikes when necessary.”