Original post on Jan 26, 2023 | Last Updated: January 27, 2023
As the union representing tens of thousands of federal public servants prepares to hold strike votes across the country, one expert in labour negotiations says we should be prepared for more contract disputes thanks to high inflation.
High inflation could mean tough negotiations to find middle ground
As the union representing tens of thousands of federal public servants prepares to hold strike votes across the country, one expert in labour negotiations says we should be prepared for more contract disputes thanks to high inflation.
Earlier this week, the Public Service Alliance of Canada (PSAC) announced it will hold strike votes for another 120,000 federal public servants, just two weeks after taking the same step for 35,000 taxation employees.
The main issue during talks, which started in June 2021, appears to be wage increases. PSAC is asking for an annual increase of 4.5 per cent for 2021, 2022, and 2023 for the four latest bargaining groups.
The government has countered by offering a 2.06 per cent raise on average over four years, an amount PSAC labelled as “insulting.”
The fact negotiations have stalled doesn’t surprise Robert Hickey, an associate professor of industrial relations at Queen’s University.
“The bargaining environment has been fundamentally changed by inflation,” said Hickey. “What PSAC is asking seems high, but in the context of relatively high inflation it’s not outside the ballpark for a starting offer.”
Hickey points to labour deals reached in 2022 in several of Ontario’s building and construction trades, where many workers received salary increases ranging from three to four per cent annually.
That only happened after they rejected tentative deals negotiated by their unions because they included lower increases.
Return of cost-of-living adjustments?
Hickey also reminds people that prices in Canada rose annually by 10 to 12 per cent in the early 1980s, which meant workers routinely negotiated wage increases in the range of eight to 10 per cent.
That period of high inflation led to the creation of cost-of-living provisions, which tied worker’s wages to the consumer price index.
“Cost-of-living adjustments don’t really exist anymore in contracts because we went through years of low inflation,” said Hickey. “There’s now a heightened expectation from workers for unions to fight for better economic protections against high inflation.”