Canada has already seen several contentious labour negotiations this year and a recent report from RBC economists suggests there could be more on the way amid high living costs.

The Royal Bank of Canada report published last week said high inflation, labour shortages fuelled by Canada’s aging population and the growing size of unions have made job actions more common as the balance of power shifts to employees.

“Lingering around a 40-year high, inflation in Canada has dramatically eroded purchasing power, forcing consumers to rethink their purchases,” the report said. “Across the country, unions have responded by demanding higher pay for their members, increasingly using labour action to further their cause.”


Higher wages have been a consistent demand from labour unions that have hit the picket lines or negotiated for new contracts with Canadian employers this year.

Over the weekend, workers at Ford Motor Co. voted to ratify a new employment contract with the automaker which includes a general wage increase of 15 per cent over three years.

In recent months, 155,000 workers at the Public Service Alliance of Canada, along with workers at the B.C. ports and Metro grocery stores in Toronto went on strike before reaching deals with management.

The report suggested these wage-driven job actions could inspire others in the future.

“The jump in recent wage settlements could entice other workers and their representatives to be more aggressive with their demands—especially when workers can soak up a lot of wage increases before catching up to inflation,” the report stated.


According to the report, inflation is key when it comes to slowing down the frequency of labour disruptions, as weakened purchasing power in times of high inflation historically leads to more work stoppages.

“As more labour contracts expire this year, taming inflation and bringing balance back to the country’s labour market will be key to restoring peace to labour relations in Canada,” the report said.

Canada’s inflation quickened to four per cent in August, prompting some experts to predict another interest rate hike next month.