Mounting union wage demands risk impeding Bank of Canada's inflation fight
Wages negotiated by union workers in Canada are creeping higher, complicating the central bank’s bid to restore price stability.
Unionized workers have staged 78 major strikes in the first six months of 2023 and pushed the average yearly wage settlement up to 2.9 per cent, government data show. That’s the highest level in at least a decade, a partial recovery in purchasing power that risks refuelling inflation expectations if momentum continues.
Canada’s largest private-sector syndicate, Unifor, which represents 37,000 autoworkers, is now in negotiations with Ford Motor Co., General Motors Co. and Stellantis NV where improving wages and pensions are “two very key priorities,” the union’s leader said.
“Our members have high expectations leading into these talks, as they should and as all workers do at this moment,” Unifor president Lana Payne said, declining to share specific demands. “People continue to go through a period where things are more costly. Your mortgage or rent is higher, and it’s still very expensive to buy food.”
Canadian workers aren’t alone. The U.S. is facing a burst of labour strife, with Hollywood actors and writers walking off the job together for the first time in a generation. The head of the United Auto Workers union asked members this week for strike authority, after demanding pay raises of more than 40 per cent from the Detroit Three carmakers over four years. Europe and the U.K. have also seen walkouts, particularly in the transport sector, over the busy summer months.
The continued success of collective bargaining suggests labour isn’t done demanding higher compensation, despite inflation slowing sharply from last year’s peak. In Canada, that could derail a complete return to price stability
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