Canadian Public Sector Workers Win Gains in the Largest Strike

For two weeks from April 19 to May 1 2023, the Public Service Alliance of Canada (PSAC) led one of the largest strikes in Canadian history, with 155,000 workers on strike. The strike involved roughly one-third of the federal civil service in Canada, and revolved around wages and inflation, remote work, action on discrimination and harassment, contracting out, and job security. The deal that PSAC ultimately secured for its largest bargaining group will set a new benchmark for inflation-adjusted wages across Canada, in unionized and non-unionized sectors alike.

Most workers in the largest PSAC bargaining unit are women who make salaries in the range of $40,000 - $65,000 CDN per year, and they have been hit hard by inflation. Recent reports have shown that the average Canadian federal public sector worker’s wages only buy the same today as they did in 2007 – no other Canadian industry has seen average inflation adjusted wages pushed back as far as federal public sector workers.

PSAC's contracts had expired in 2021 and negotiations began that year, but things stalled and by 2022 as inflation continued to chip away at workers’ real wages, paving the way for this spring’s strike vote.

The strike included federal public servants across 30 departments, including those who provide information to Canadians about benefits, process passports, support veterans and work with Indigenous communities.

The union’s initial demands were for a 13.5% pay increase over 3 years, with the government offering 9%. During the same period, inflation in Canada ran at 13.8%. The issue of remote work was also significant, with the union fighting for its inclusion in the collective agreement, while the government maintained that place of work was a management prerogative.

The strike was seen by many commentators as a risky gamble for PSAC in a country where public opinion often sees public sector workers as already having a good deal with benefits and job security. In fact, the union seems to have chosen a moment of political opportunity that set them up for success.

Justin Trudeau’s Liberal government, considered to be friendly to organized labour and currently supported in a confidence and supply agreement by the social democratic NDP, was unlikely to use back-to-work legislation to end the labour action. The opposition Conservatives, mindful of courting unionized voters, refrained from attacking striking workers. This political environment gave space for a deal to be reached without exacting a high political cost for either the government, or the union.

By May 1^st PSAC was able to negotiate a new deal for 120,000 of their workers with important wage gains. The agreement secured wage increases totaling 12.6% compounded over the life of the agreement from 2021-2024. Additionally, PSAC got a fourth year in the agreement, as well as a pensionable $2,500 one-time lump sum payment for workers. Some progress was made on the issue of remote work, with a new agreement to address remote work requests individually and in writing – although managers will have the last say.

The success of the PSAC strike is expected to have a ripple effect in Canada's labor market, with upward pressure on wages in both the public and private sectors. Canada currently has a low unemployment rate at 5% and a high demand for workers, making it a favourable time for those looking to secure wage gains to compensate for inflation. The fact that PSAC bargained and made progress on flexible teleworking arrangements is also noteworthy, as more and more Canadians look for work that gives them more autonomy over their time and workplace.

Despite the perception that government workers already enjoy good working conditions, the Canadian public remained broadly supportive of the union's demands during the strike, particularly on the issue of remote work. In part, this is likely also because public sector strikes in Canada are relatively rare and generally less disruptive compared to European standards - people may have experienced delays getting passports and completing other bureaucratic processes, but the overall impact on daily life for most Canadians was minor.

But it also points to a new reality in tight labour markets like Canada: workers are demanding, and winning, better working conditions with more flexibility and wages that keep pace with the cost of living. Union engagement and worker militancy are on the rise, and the general public sees a benefit to strong gains in benchmark public sector agreements like this one – in the hopes that it will set the bar higher for all workers.