Strike ends for 120,000 federal workers

After 12 days of picketing, most striking federal government workers are back on the job.

What happened: 120,000 striking federal workers have returned to work after the union representing them and the federal government reached a tentative agreement that would include a 12.6% wage increase over three years and some remote work accommodations. 

  • The union has to formally accept the deal, but it’s likely given the offer is within a percentage point of the union’s ask. 

Catch-up: Over 155,000 federal workers have been on strike for almost two weeks after the union rejected the government’s offer of a 9% wage bump. 

  • 35,000 workers at the Canada Revenue Agency remain on strike as negotiations between the feds and their union continue.

Why it matters: While a win for federal employees, a recent note by Scotiabank economist Derek Holt points to International Monetary Fund findings that show how accelerated public sector wage settlements tend to influence private sector wages, too.

  • They estimated particularly strong effects in countries like Canada, which faces a tight labour market and a high rate of unionization (~30%, triple the rate of the US).

Bottom line: “The lagging effects of these multi-year agreements that have been signed to date may still lie ahead,” wrote Holt. With the Bank of Canada expecting inflation to cool to 3% by June, a 12.6% boost in federal worker spending power might make things stickier.—SB