Rising inflation and a mandatory back-to-the-office order threatens to unleash a winter of discontent in Canada’s public service, marked by chaos, labour unrest and a possible strike.

The federal government is bargaining with nearly all the unions representing more than 300,000 public servants. Like all Canadian workers, they want wage increases to cover galloping prices. But what also fuels their fire is frustration over being ordered to return to the office two to three days a week after working remotely for nearly three years.

The most rebellious are in the National Capital Region, where nearly half of the public service works. Senior bureaucrats privately predict a “very rocky ride,” chaos and a “total nightmare” sorting out the logistics of hybrid work that many workers don’t want.

The problem is that the federal unions can’t negotiate where public servants work. That’s a management decision. But union leaders are exploiting that anger to get their members, who may normally shy away from job action, to vote for a strike. That way, it becomes a bargaining chip.

If the Public Service Alliance of Canada (PSAC) – the largest and most militant of the unions – secures a strike vote, 165,000 workers could be on picket lines by spring, just in time to gum up the end of the all-important tax season. It could also be largest strike against a single employer in Canada’s history.

A positive strike vote puts PSAC in a legal strike position. The union argues that a strong strike mandate gives it extra clout to negotiate a deal. Strike votes began this week among tax workers and roll out to 120,000 other public servants between Feb. 22 and April 19.

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“The union has wind in their sails for a strike mandate,” said a long-time senior bureaucrat. “Treasury Board may say (remote work) is not a bargainable issue, but, come on, people are out on strike over it and you won’t bargain that?”

“Why not give unions something on the return to office so they reduce their 14-per-cent raise demands. Everything is negotiable.”

Complicating the issue is the fact Parliament has returned for a new session.

Prime Minister Justin Trudeau is dealing with an uncertain economy and its political fallout while Conservative Leader Pierre Poilievre is snapping at his heels, claiming fiscal mismanagement and alleging that everything in government seems broken. That’s also a swipe at the public service, which Poilievre says is too big while the services it provides aren’t working properly.

For the political parties, this is all about positioning for the next election. The unions are angling for the biggest wage increases possible to catch up with inflation before that vote. That last thing they want is to face is the possibility of a labour-unfriendly Conservative government at the bargaining table after the election.

But the unions must tread carefully or risk public wrath. Their demands can’t seem unreasonable and out of touch. Many Canadians have gone back to the office amid rising inflation and soaring interest rates. Unlike public servants, many Canadians lost their jobs during the height of the pandemic.

There’s also the question of whether Canadians will blame the unions or the government if escalating labour disputes turn into more service disruptions.

The heat is already on. The Canadian Federation of Taxpayers is pushing the government to hold the line and reject PSAC’s opening demands.

The union is seeking a wage increase of 13.5 per cent over three years, which is in line with inflation. But that’s on top of a laundry list of other demands, which Treasury Board estimates says could add up to as much as $3.1 billion a year. That’s $9.3 billion over a three-year contract.

Safe to say, this has been an unusual round of bargaining. In fact, it could be a proxy war for a future legislative battle to fix what PSAC argues is a broken bargaining process.

PSAC and Treasury Board are poles apart and as far from a deal as when the union declared an impasse and walked away from the table last May. Relations are strained and getting worse.

Public interest commissions (PICs) were appointed to help resolve the disputes for each of the five PSAC groups where an impasse was declared. Two have delivered reports with the independent panelists throwing up their hands, unable to find any middle ground to even make recommendations.

“We have concluded that time is not ripe for productive collective bargaining,” said one report. It called for a “reset to collective bargaining – in whatever fora – with a focus on priorities and compromise.”

PSAC represents workers in all kinds of jobs, from clerks and carpenters to communications officers. They have common issues, such as wage increases, job security and work-life balance, but others are specific to different jobs. They could include new overtime rates, wage adjustments or special allowances.

Take the operational group, which includes tradespeople, hospital services workers, lightkeepers, firefighters and ships’ crew. Proposed wage and non-wage benefits – with compounding – will increase the group’s compensation bill by 47 per cent over three years, says Treasury Board. That amounts to an annual hike of 14 per cent, which the PIC panel called an increase “far beyond what is reasonable.”

That’s the biggest increase, but Treasury Board calculates that annual increases for other groups include an eight-per-cent annual jump in total compensation for the education and library group; nine per cent for the program and administrative services group; and nine per for the technical services group.

One of the PIC reports concluded talks were doomed from the start.

“Unreasonable proposals rarely result in successful negotiations. With respect to the numerous proposals tabled in this round of negotiations by both parties, it should have been reasonably obvious, in our opinion, that what the negotiators were instructed to try to achieve would be ultimately unattainable and would lead to no other result than failure.”

PSAC officials say their demands are opening positions and the union has been unable to replicate Treasury Board’s “inflated” calculations.

“During negotiations, no party ever walks away with every demand they have on the table. Treasury Board’s inflated projections are designed to distract from the fact that they won’t commit to wage increases that keep up with inflation,” said PSAC President Chris Aylward.

“The reality is that for nearly two years, the government has stalled talks and refused to sit down and meaningfully negotiate. That’s why we declared impasse and launched strike votes – to give workers the power to put pressure on this government to negotiate.”

Another signal of an unusual bargaining round comes from Treasury Board. It rarely talks publicly about bargaining, but this time isn’t pulling any punches. It issued statements about how PSAC is bargaining in bad faith, dodging the mediation process, seems hell-bent on striking, and is disingenuous about how much money its wage demands will cost.

Treasury Board and PSAC are squaring up for battle at the federal public service labour board, each accusing the other of unfair bargaining. PSAC’s claim is over the return-to-work, which it argues violates the statutory freeze on working conditions when bargaining is underway.

Treasury Board shot back with its own complaint against PSAC for even thinking about calling strike votes before the various public interest commissions delivered their reports. PSAC dismisses the complaints as stalling tactics, meant to delay the process and slow down bargaining so the government can make preparations for a possible strike or other job action.

The government could also be trying to drag out bargaining until after the next election, which could fray PSAC’s resolve because of its fear of having to negotiate with the Conservatives, who might win the next election and who want smaller government and less spending.

Or the government may also want time to get the message out that PSAC is hell-bent on striking, which would facilitate shifting the blame to the unions if big service disruptions take place.

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PSAC has long complained it takes years to negotiate a deal with the federal government when other jurisdictions take only months. It has also already flagged its next battle is to reform the legislation governing collective bargaining, including the PIC process.

Meanwhile, PSAC continues to get its ducks in a row for a possible strike. Its last big strikes were in 2004 and in 1991, when 100,000 clerical staff walked off the job.

It is mounting plans for strike votes, leading strike training, calling townhalls, crafting media campaigns and teaching workers how to file grievances or complaints about the return to office.

Not all federal unions pursue strikes. The other big ones – such as the Professional Institute of the Public Service of Canada, and the Canadian Association of Professional Employees – opt to settle contract disputes by arbitration. Many other federal unions pick arbitration because they are too small to mount effective strikes.

As a result, PSAC, which considers itself a hardline negotiator, has historically led the way and set the pattern for wage settlements across the public service.

But another unusual twist in this bargaining round came when a small union representing financial officers took the lead and settled for an 11-per-cent raise over four years.

Treasury Board wants that deal to set the pattern for settlements with all unions. With the return-to-office order, however, other unions are expected to wait and see what deal PSAC can swing.

This article was produced with support from the Accenture Fellowship on the Future of the Public Service. Read more of Kathryn’s work here

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Kathryn May
Kathryn May is a reporter and the Accenture fellow on the Future of the Public Service, providing coverage and analysis of the complex issues facing Canada’s federal public service for Policy Options. She has spent 25 years covering the public service – the country’s largest workforce – and has also covered parliamentary affairs and politics for The Ottawa Citizen, Postmedia Network Inc. and iPolitics. She is also the winner of a National Newspaper Award and a Canadian Online Publishing Award. Follow Kathryn on Twitter: @kathryn_may.

You are welcome to republish this Policy Options article online or in print periodicals, under a Creative Commons/No Derivatives licence.

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