OTTAWA, (Reuters) – Canada’s government struck a deal with 120,000 federal workers yesterday, effectively ending the country’s largest public-sector strike ever that had crippled services from passport renewals to immigration for almost two weeks.
While most strikers returned to work yesterday, more than 35,000 revenue agency workers who also walked out on April 19 are still negotiating, the Public Service Alliance of Canada (PSAC) union said.
That deadlock will continue to slow the processing of annual tax returns. Those union members who got an agreement will vote on whether to accept the deal “in coming days”, PSAC said.
“This May Day we’re celebrating a huge win, on the heels of one the largest strikes in Canadian history,” PSAC said on Twitter, referring to International Workers’ Day, which is celebrated on May 1.
The deal will be a relief for Liberal Prime Minister Justin Trudeau, who has often won the support of unions and union members in his three election wins, according to pollsters.
Union leadership will cast the deal as “an honourable compromise,” said Michael Wernick, Canada’s former top bureaucrat who is now a professor at the University of Ottawa. The union members “couldn’t have got everything they wanted.”
PSAC said it had secured a total wage increase of 12.6% over four years, having turned down an offer of 9% over three years when it called the strike. The deal includes a one-off payment of C$2,500 ($1,845).
The union got a “good deal” on wages, said labour lawyer Rich Appiah, and it “will be used as a precedent in other negotiations.”
The Treasury Board, which is the employer, still has about two-dozen other public-sector contracts to negotiate, said the board’s president, Mona Fortier.
The deal “is reasonable” and “fair for Canadians,” Fortier said. “I have another 23 more deals to work on now.”
INFLATION AND REMOTE WORK
The wage agreement will make it harder for the central bank to bring inflation back to its 2% target, said Derek Holt, head of Capital Markets Economics at Scotiabank. Inflation was 4.3% in March, down from a peak of 8.1% last year.
“This deal will complicate the Bank of Canada’s inflation fight,” Holt said. There is evidence collective agreements “can ripple through other wage agreements and buoy core inflation for longer.”
