2023 Canadian Federal Worker Strike

The 2023 Canadian federal worker strike was a strike by Canadian federal workers who are members of the Public Service Alliance of Canada (PSAC). The strike took place between April 19 and May 3, 2023, although the Treasury Board bargaining units ended their strike on May 1.

The strike was the culmination of more than a year of collective bargaining following the expiry of the previous collective agreement in 2021, with it ultimately resulting from disagreements between PSAC and the Government of Canada (represented in bargaining by the Treasury Board of Canada Secretariat) on issues related to remote work, enhanced work amenities and wage increases to compensate for inflation. It affected several federal programs, including passport renewals and immigration processing. The strike was also expected to have an impact on tax season, such as processing delays, with the deadline for taxes having remained unchanged at April 30, 2023 (May 1, 2023, since April 30 was a Sunday).

Early on May 1, PSAC announced that a tentative agreement had been reached for the , , , and bargaining units and that workers in these units were required to return to work at 9a.m.ET on May 1, or their next scheduled shift after that date. Workers from the Union of Taxation Employees (UTE) bargaining unit continued to strike until a tentative agreement was announced on May 3, ending the strike altogether, at which point they were required to return to work by May 4 at 11:30a.m.ET at the latest.

Background

The Public Service Alliance of Canada (PSAC) is the largest public sector union in Canada, representing 159,000 public service workers, of which 120,000 fall under the Treasury Board of Canada and 39,000 are Canada Revenue Agency (CRA) employees under the Union of Taxation Employees (UTE) component of PSAC.

Prior work contracts for PSAC workers had expired in 2021. Since June 2021, PSAC had been bargaining with the Government of Canada to establish a new contract, largely as an attempt to increase worker pay to keep up with a surge of inflation, which had precipitated an increase in the cost of living. CRA workers sought a 30% increase in wages over the next three years, while others were asking for a 13.5% increase, amounting to a 4.5% annual increase. The Government of Canada had offered a 9% increase instead, but PSAC would not accept it. In addition, PSAC repeatedly called for an agreement regarding remote work, in spite of a December 2022 mandate by the Treasury Board that requires workers to work from government offices at least 40–60% of the time (two to three days per week in most cases). The union had also pushed for greater anti-racism training and increased limits on contract work.

In May 2022, the union went to a labour board, leading to the release of a non-binding report in January 2023. The report recommended increased allowances for employees, and enhancements of family leave, shift premiums, and flexibilities. A press release disclosed that the government would enter into meditation with PSAC in April.

Both the Government of Canada and the union agreed that workers needed an increase in wages. However, the size of the wage increase was subject to negotiation. Despite attempts to reach a consensus, discussions between the parties were slow to progress. As a result, on February 22, 2023, a strike vote of the membership was held by the Treasury Board component of PSAC. The UTE component of PSAC held a strike vote on January 31. The Treasury Board bargaining units entered a legal strike position on April 12, followed by the UTE bargaining unit on April 14.

Strike

On April 7, the CRA bargaining group voted to enter a legal strike position. On April 12, the national president of PSAC, Chris Aylward, announced that the Treasury Board bargaining unit had voted overwhelmingly in favour of entering into a legal strike position, thus granting the group a 60-day window to initiate a labour strike. On April 19 at 12:01a.m. ET, the strike began. Approximately 100,000 of the 159,000 PSAC members left their jobs in order to picket at hundreds of locations across the country. However, approximately 30,000–46,000 jobs (including approximately 8,600 Canada Border Services Agency workers who constitute PSAC's bargaining unit) were deemed essential (i.e., they were considered necessary to the safety or security of the public or a segment of the public), meaning these workers could not participate in a strike and needed to continue to work, nor could strikers impede essential workers' access to their workplaces.

National Capital Region

In the National Capital Region, striking workers had been demonstrating at 13 different picket locations, including in front of the Office of the Prime Minister and Privy Council, Parliament Hill, the Treasury Board office, the Tourism Minister's office, the Department of National Defence office, the Canada Revenue Agency office, Tunney's Pasture, Canada Post headquarters, the Department of Finance, as well as the offices of MPs Greg Fergus, Mona Fortier, Marie-France Lalonde, and Steven MacKinnon.

Nationwide

Workers striked at various locations throughout Canada, including passport offices in Ontario, the Parole Office in Edmonton, the Natural Resources Canada office in Vancouver, the Canada Pension Plan office in Victoria, military bases in Quebec, as well as local offices in Winnipeg, New Brunswick, Newfoundland, Nova Scotia, and Prince Edward Island.

Negotiations

On April 24, Mona Fortier wrote an open letter to public servants and Canadians, in which she identified four main areas of disagreement that remained between the government and PSAC: wages, teleworking, outsourcing contracts, and seniority rules in the event of a layoff. PSAC responded to this letter by reiterating their desire to reach a "fair deal". On April 26, Fortier released a statement, in which she expressed frustration with the offers tabled by PSAC negotiators. On April 28, the Treasury Board of Canada Secretariat presented a "final updated comprehensive offer that addresses all remaining PSAC demands", without releasing details of the offer to the public. The same day, PSAC confirmed that it received the offer, but expected negotiations to continue into the weekend. In the early hours of May 1, at around 1:20a.m. ET, PSAC confirmed that they had reached a tentative agreement for the , , , and bargaining units at the Treasury Board, and that these groups would be required to return to work at 9a.m. ET on May 1, or their next scheduled shift after that date.

Impacts

Impacts on federal programs, services, and operations

In a press conference on April 19, 2023, ministers Mona Fortier ( President of the Treasury Board), Karina Gould ( families, children and social development), Diane Lebouthillier ( national revenue), and Sean Fraser ( immigration, refugees and citizenship) outlined impacts of the strike on certain federal programs and operations. Among these impacts were delays in processing income tax returns and immigration applications, as well as providing passports only in humanitarian or emergency situations.

While essential services continued to be delivered during the labour disruption, Canadians could expect others to be delayed or interrupted. The following table lists these disruptions:

Economic impacts

The Canadian government had claimed that the strike would not affect the normal flow of people and goods in and out of the country. However, the previous federal strike of this magnitude (in 1991) resulted in delays of some international commodity shipments and disruptions of flights and international travel.

It was speculated by Charles St-Arnaud, chief economist at Alberta Central, that the magnitude of the wage increase resulting from negotiations could prompt other unions to follow suit, which could be inflationary, because if more people ask for higher wages, this can sustain the inflationary cycle by increasing consumers' purchasing power, which in turn stimulates demand for more goods and services and therefore puts price pressures on costs. Since the labour market is tight, private companies might have to match public salaries to keep prospects from going to work for the government. However, regardless of the magnitude of the wage increase, the private sector have the capacity to absorb costs rather than raise their prices, and the Bank of Canada has the capacity to control a potential increase in demand (resulting from higher wages) by increasing interest rates, thus potentially limiting the ability of other unions to secure comparable gains.

Modelling from the Conference Board of Canada suggested that household income in Ottawa–Gatineau would decrease by $44 million per week, representing 5% of total wages and salaries in the CMA, since strike pay was significantly below workers' regular salary. As a result, a prolonged strike would impact consumer-facing businesses such as restaurants and retailers the most, and the strike could have broader impacts on the Canadian economy due to the prolonged disruption to government services and programs. As well, since workers on strike did not receive their regular pay (and were instead paid by the union), government spending was reduced (although likely by a less-than-proportinate amount to the foregone salaries), which would negatively impact nominal GDP.

Reactions

The Canadian Federation of Independent Business, in an April 19 press release authored by its president, Dan Kelly, expressed concern over the strike's impacts. It urged the Government of Canada to ensure that all departments maintain full service to small business, continue negotiation "to ensure a long-term and affordable collective bargaining agreement is signed", and prepare back-to-work legislation "should strike action last more than a few days". Restaurants Canada also expressed concern over the impacts of the strike, particularly on the foodservice industry and on small and medium-sized businesses more broadly.

NDP leader Jagmeet Singh expressed his support for federal workers ahead of the strike vote. He also expressed that the NDP would not back any back-to-work legislation that may be put forth by the Liberals. This sentiment was shared by the Canadian Labour Congress in an April 19 letter written by its president, Bea Bruske, to Mona Fortier, opposing the push by the Canadian Federation of Independent Business for back-to-work legislation.

Conservative MP Stephanie Kusie commented on the strike by criticizing prime minister Justin Trudeau's actions since he took office in 2015, attributing the strike to inflation, an increased public service budget, and increased spending on external consulting.

References

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2023 labor disputes and strikes
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Federal worker strike, 2023
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Premiership of Justin Trudeau