While all eyes have been on Canada Post’s rotating strikes, another labour relations storm is brewing and is causing much more concern for the Conservative government — a major work stoppage at Air Canada that may start next Tuesday.
Nearly 4,000 Air Canada customer service and sales staff will strike, if their demands are not met by the deadline of midnight Monday, according to their union, the CAW.
Air Canada says it has a contingency plan in place and intends to maintain full operations. But what worries Labour Minister Lisa Raitt is that the airline is also facing potential disputes with its three other unions, CUPE (which represents 6,800 flight attendants), the IAMAW (which represents 11,000 mechanics, baggage handlers, cargo agents and warehouse staff) and the Air Canada Pilots’ Association.
“Having Air Canada cease regular service is far more problematic [than the Canada Post strike],” said Ms. Raitt. “We monitor strikes for impact on the public interest and the national economy. So far, in the case of Canada Post, we’re not seeing the work stoppage having that great an effect on the economy. Last time there was a strike in 1997, there was public outcry. We’re not seeing that level of outcry.”
For three of Air Canada’s unions — the CAW, CUPE and the IAMAW — the big issue is pensions. Air Canada has about $13-billion in pension liabilities and its pension deficit is more than $2-billion. “This deficit is not sustainable and has not been sustainable for most of the decade, as it puts at risk both the viability of the company and the pensions of all employees,” Air Canada has said.
The unions say that the company is making “offensive” demands for dramatic permanent reductions in pension benefits for existing employees and a parallel demand to eliminate defined pension benefits altogether for new employees.
They argue that the defined benefit plan is sustainable, if the company lives up to its “legal and moral obligations.” “The fact that Air Canada’s top executives continue to receive extremely generous defined benefit pension credits … disproves the claim that defined benefit pensions are no longer feasible or desirable,” they said in a joint statement.
There is a very real possibility that Air Canada will be grounded at some point over the next few months. Taken alongside the Canada Post dispute, it suggests that Canadians are about to live through a summer of discontent, where powerful unions hold the country to ransom.
But some context is required. The number of strikes in Canada has plummeted in recent years — from an average of 328 per year between 1996 and 2005, down to just 175 last year, the fewest since the 1950s. By other measures, labour disruptions are at historic lows. Time on strike, taken as a percentage of total time worked, in the years 2008-2010 was 0.04% — the lowest since 1938-40. This reflects a long-term slide in union membership that, in the private sector, has halved from one in six employees, to just one in three today.
David Camfield, associate professor of labour studies at the University of Manitoba, said that, far from unions flexing their muscles, the current unrest has been caused by companies looking for concessions from their workforce. “The great recession of 2008/09 had a real impact and people were terrified about losing their jobs. The overall balance of power tilted in favour of the employer and the side that has the advantage will pursue that advantage,” he said.
It is no surprise that the Canadian Union of Postal Workers is in the vanguard of union resistance. Its constitution sees its goal as nothing less than the transformation of the entire social and economic order. CUPW rejects the logic of “belt-tightening;” it promotes the development of a planned economy through public ownership and it is actively “working to defeat capitalist globalization.”
Yet, in this case, it’s clear that the management is not just bullying workers because it can — there are significant business challenges facing the Crown corporation, not the least of which is the 20% decline in the number of mail items handled since the introduction of email.
In this case, Canada Post wants to create a two-tier system of employees, where new hires get a less generous wage and benefit package than those already employed. The union is having none of it, hence the strike and Tuesday’s news that they have stepped away from the bargaining table.
The effectiveness of that action can, perhaps, be judged by the government’s response. There is no sign that Ms. Raitt is going to introduce back to work legislation any time soon because, aside from seniors waiting for the benefit cheques, the strike is simply not biting. “We’re getting a taste of how the monopoly in delivery of communications doesn’t seem to exist anymore. It’s a different world than 1997,” said Ms. Raitt.
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