Fresh produce and groceries are shown at Summerhill Market in Toronto on Feb. 2, 2022. Statistics Canada says food prices edged up 7.4 per cent in February compared to a year ago.Frank Gunn/The Canadian Press
With annual inflation rising to 5.7 per cent in February, the quickest pace in 30 years, few workers have seen their paycheques grow anywhere near that fast. If history is any indication, Canada could soon see a wave of strikes as unions seek to change that.
Doug Porter, the chief economist at BMO Capital Markets, wrote in a note this week that work stoppages “tend to follow within months of a run-up in [CPI]. Not surprisingly, the driver tends to be a push by unions to keep up with inflation at a time when firms are attempting to hold the line on costs.”
For most of the past 40 years, the number of work stoppages has been on the decline, according to Statistics Canada, which classifies a stoppage as any strike or lockout that lasts 10 or more “person days.” Labour unrest almost vanished during the pandemic, with the number of stoppages falling to the lowest level in 75 years.
Will rising inflation lead to more labour unrest?
Number of work stoppages
(12-month moving total)
CPI, year-over-year
% change, 2002=100
3,000
16%
14
2,500
12
10
2,000
8
1,500
6
4
1,000
2
0
500
-2
0
-4
1963
1971
1979
1987
1995
2003
2011
2019
the globe and mail, Source: BMO Capital Markets;
Statistics Canada
Will rising inflation lead to more labour unrest?
Number of work stoppages
(12-month moving total)
CPI, year-over-year
% change, 2002=100
3,000
16%
14
2,500
12
10
2,000
8
1,500
6
4
1,000
2
0
500
-2
0
-4
1963
1971
1979
1987
1995
2003
2011
2019
the globe and mail, Source: BMO Capital Markets;
Statistics Canada
Will rising inflation lead to more labour unrest?
Number of work stoppages
(12-month moving total)
CPI, year-over-year
% change, 2002=100
3,000
16%
14
2,500
12
10
2,000
8
1,500
6
4
1,000
2
0
500
-2
0
-4
1963
1971
1979
1987
1995
2003
2011
2019
the globe and mail, Source: BMO Capital Markets; Statistics Canada
As Mr. Porter noted, that is likely to reverse sharply with inflation pushing up the cost of living. At the same time, Canadian companies are grappling with labour shortages in several sectors of the economy, potentially giving workers an edge in negotiations.
This isn’t just a matter of restless public-sector unions either. While the share of private-sector employees covered by unions fell to 15 per cent last year from 21 per cent in 1997, the private sector still accounts for most work stoppages.
In fact, the recent uptick in labour unrest has almost entirely involved private-sector employees, according to Statscan, with workers in the hard-hit entertainment and hospitality sectors leading the way.
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Jason Kirby