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How Will The Public Service Worker Strike Affect Canada’s Economy?

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In cities across Canada, tens of thousands of public sector workers are on strike, protesting at picket lines in front of government buildings. The Public Service Alliance of Canada (PSAC), the union representing Canadian federal workers, announced a strike starting early in the morning on April 19, 2023.

Over 155,000 federal workers are on strike, a group that accounts for nearly a third of all of the country’s public servants.

The protest is the biggest strike in Canada in over 30 years. Union members are organizing picket lines in over 250 locations across the country. The PSAC union is offering members CAD$75 per day for joining picket lines and is encouraging members of the public to join the protest.

In a statement on April 18, 2023 Chris Aylward, PSAC’s national president, said workers are fighting for “fair wages” and “good working conditions.”

The protests are expected to affect multiple government services including tax filings and passport renewals.

Striking workers include around 120,000 workers from Canada's Treasury Board and 35,000 individuals who work for Canada’s tax agency.

Canada’s government offered a 9% wage increase over three years, but the union asked for a higher increase, citing high levels of inflation and cost of living increases.

Significance:

Foreign executives keeping an eye on Canada’s protests need to understand that the picket lines are unlikely to have a major impact on Canada’s economy or operating environment. During the 2023 strike, PSAC’s picket lines in Canada have been peaceful and orderly. Companies with operations near protest sites are not likely to be affected by vandalism or violence. No arrests have been made at protest sites.

Protests are being organized near government buildings, for the most part. Picket line locations include the Prime Minister’s office, the Treasury Board office, and passport offices in Ontario, the Tourism Minister’s office, the Department of National Defense office, and the Parole Office in Edmonton, the Natural Resources Canada office in Vancouver, the Tax service office, the Canada Pension Plan office in Victoria, military bases in Quebec, as well as local offices in Winnipeg, New Brunswick, Newfoundland, Nova Scotia, Prince Edward Island and other parts of the country.

It is possible that normal flow of traffic may be affected by ongoing protests. Access to important government buildings across the country will be disrupted by picket lines.

If the strike continues, a number of government services could experience disruptions or delays. Emergency services, however, are not likely to be disrupted by the strike. But, a backlog is likely to emerge for immigration procedures and passport services, potentially affecting companies with foreign-born workers who need work permits.

The strike could also cause delays for child-benefit payments and senior citizen benefits, potentially affecting companies with low-income or elderly employees. The strike could also cause processing delays for new applicants seeking veteran’s benefits.

Canada’s government has claimed that the strike will not affect the normal flow of people and goods in and out of the country.

However, the previous federal strike of this magnitude (in 1991) resulted in delays of some international commodity shipments and disruptions of flights and international travel.

It is unclear how long the PSAC strike could last. The 1991 strike endured for 13 days before the Canadian drafted legislature to force workers to return to their jobs. A smaller strike in 2004 lasted for under a week.

Given their recent track record of successful negotiations, PSAC is likely to secure a wage increase for members.

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