Collective bargaining trends in Canada, 1984-2014

Introduction

This report presents some of the major trends over the last three decades in collective bargaining in Canada, including the number of collective agreements, the duration of contracts, and the number of work stoppages. The analysis is based on data collected by the Workplace Information and Research Division of the Labour Program.

Number of agreements

Between 1984 and 2014, a total of 12,799 major collective agreements Footnote 1 were settled, of which 10.9% were reached in the federal jurisdiction. Footnote 2 Over the past 30 years, the number of settled agreements per year trended downwards, dropping from a high of 575 agreements in 1984 to 324 agreements in 2014 (Figure 1). Footnote 3 This trend is visible across both the public and private sectors.

Three major factors may explain the decrease in the number of settlements in Canada:

  • The decreasing rate of unionization-from 39.6% Footnote 4 in 1984, the unionization rate of employed individuals had dropped to 31.5% Footnote 5 in 2014;
  • Mergers between unions-in 1990, there were 1,016 unions Footnote 6 and in 2014, there were 770 Footnote 7 ; and
  • Longer contract durations.

Contract duration

The duration of agreements has increased since 1984 (Figure 1). The average duration was 19.6 months in 1984, and by 2014, it had doubled (40.0 months). Several factors have influenced this increase, including the desire (on the part of both employers and unions) to control the costs associated with frequent bargaining, and a business and legislative climate that encourages longer contracts. For example, in an attempt to create a more investment-friendly environment in Quebec, in 1994, the province eliminated (except in the case of a first agreement) the three year limitation on collective agreements, aligning itself with other Canadian jurisdictions.

Figure 1: Number and duration of agreements

Monthly employment and unemployment rate. The data table for this graph is located below
Show data table: Number and duration of agreements
Figure 1: Number and duration of agreements
Year Number of agreements Duration
1984 575.0 19.6
1985 577.7 22.1
1986 542.7 23.7
1987 515.7 26.7
1988 524.3 26.9
1989 491.0 28.3
1990 500.7 27.8
1991 502.3 25.4
1992 516.7 23.6
1993 520.3 22.1
1994 482.7 25.5
1995 451.3 28.4
1996 404.7 31.3
1997 386.7 33.3
1998 390.0 32.9
1999 390.3 34.0
2000 399.0 34.2
2001 405.7 34.7
2002 400.0 32.5
2003 381.0 32.5
2004 354.3 33.3
2005 382.7 39.2
2006 383.0 41.8
2007 362.0 42.1
2008 326.3 40.4
2009 313.7 39.9
2010 328.3 41.4
2011 315.7 40.8
2012 300.7 39.7
2013 349.0 38.1
2014 323.7 40.0

Wage adjustments Footnote 8

Wage adjustments and inflation

The rate of inflation plays an important role in collectively bargained wage settlements. Unions are concerned with catching wage adjustments up to the prevailing inflation rate and always wish to ensure that wage adjustments do not fall behind the anticipated rate of inflation over the length of their contracts (Dodge and Fray, 2003, 2).

Wage changes, therefore, tend to follow a similar pattern to that of inflation, measured by the consumer price index (CPI) Footnote 9 (Figure 2). Higher inflation in the late 1980s and the early 1990s was accompanied by higher wage increases recorded in collective bargaining settlements across Canada. Similarly, between 1992 and 1994, the rate of inflation experienced a significant drop, and so did the average wage gains.

Figure 2: Average wage adjustment and inflation

Show data table: Average wage adjustment and inflation
Figure 2: Average wage adjustment and inflation
Year Wage adjustment Inflation
1984 6.2 7.0
1985 4.0 4.7
1986 3.6 4.1
1987 3.7 4.2
1988 3.9 4.1
1989 4.5 4.5
1990 5.1 4.6
1991 4.8 5.2
1992 3.8 3.9
1993 2.1 3.0
1994 1.0 1.1
1995 0.6 1.4
1996 0.7 1.3
1997 1.1 1.8
1998 1.3 1.4
1999 1.8 1.4
2000 2.1 1.8
2001 2.7 2.3
2002 2.9 2.5
2003 2.9 2.5
2004 2.4 2.3
2005 2.2 2.3
2006 2.2 2.0
2007 2.7 2.1
2008 3.0 2.2
2009 3.0 1.6
2010 2.5 1.5
2011 2.0 1.7
2012 1.7 2.1
2013 1.6 1.8
2014 1.6 1.5

Between 1984 and the late 1990s, inflation was higher than the average wage adjustments (except for a period in the late 1980s). During this time, workers experienced a decrease in their real wages. In comparison, starting in 1998, wage adjustments were higher or equal to inflation.

There is significant disparity in wage adjustments across industries. However, the average annual wage adjustments across industries tended to be higher in periods of high inflation, and to be lower in periods of low inflation. For example, this pattern can be seen in the wage changes in the manufacturing, and education, health, and social services industries Footnote 10 (EHSS) (Figure 3).

Figure 3: Average wage adjustment-by industry, and inflation

Show data table: Average wage adjustment-by industry, and inflation
Figure 3: Average wage adjustment-by industry, and inflation
Year Manufacturing EHSS Inflation
1984 6.1 6.0 7.0
1985 4.6 3.4 4.7
1986 3.8 3.4 4.1
1987 3.9 3.7 4.2
1988 4.1 3.9 4.1
1989 4.9 4.6 4.5
1990 5.1 5.0 4.6
1991 4.7 5.0 5.2
1992 3.6 3.6 3.9
1993 2.6 2.1 3.0
1994 2.0 0.7 1.1
1995 2.1 0.3 1.4
1996 2.3 0.2 1.3
1997 2.4 0.7 1.8
1998 2.1 1.0 1.4
1999 2.4 1.4 1.4
2000 2.5 1.9 1.8
2001 2.9 2.6 2.3
2002 2.9 3.0 2.5
2003 2.9 3.3 2.5
2004 2.8 2.4 2.3
2005 2.5 2.1 2.3
2006 2.4 1.9 2.0
2007 2.4 2.8 2.1
2008 2.0 3.3 2.2
2009 1.8 3.4 1.6
2010 1.4 2.8 1.5
2011 1.7 2.0 1.7
2012 1.4 1.5 2.1
2013 1.6 1.2 1.8
2014 1.7 1.2 1.5

From the mid-1990s to 2008, unionized employees in the manufacturing industry received wage adjustments that were higher than inflation, representing real wage gains. Wage adjustments fell below the rate of inflation during the 2008-2009 recession, but started to grow faster than inflation over the last few years. In contrast, the wage adjustments in the EHSS industry experienced more variation and followed a pattern much closer to the overall average wage adjustment.

Figure 4 (a) and Figure 4 (b) display wage adjustments settled in major Footnote 11 jurisdictions over the last 30 years. Several trends are identifiable:

  • Wage adjustments in Ontario were higher than inflation, with the exception of the mid-1990s and since 2011. Employees in the federal jurisdiction and Quebec experienced wage increases below inflation more often than those in Ontario;
  • Since the late 1990s, employees in Alberta have received higher wage settlements than in other jurisdictions. This is predominantly attributable to Alberta’s successful oil and gas industry; and
  • Although employees in British Columbia received some of the highest wage gains in the early 1990s, they received lower wage gains than those in the other jurisdictions between the late 1990s and 2008. These wage gains were also often lower than the rate of inflation, representing real wage declines for many employees in British Columbia.

Figure 4 (a): Average wage adjustment-by jurisdiction, and inflation

Show data table: Average wage adjustment-by jurisdiction, and inflation
Figure 4 (a): Average wage adjustment-by jurisdiction, and inflation
Year Federal
jurisdiction
Quebec Ontario Inflation
1984 6.4 4.7 7.0 7.0
1985 4.4 2.9 5.2 4.7
1986 3.8 3.4 4.6 4.1
1987 3.2 3.9 4.7 4.2
1988 3.4 4.1 4.8 4.1
1989 3.6 4.6 5.5 4.5
1990 4.4 4.7 6.1 4.6
1991 4.0 4.3 6.2 5.2
1992 3.5 3.0 4.9 3.9
1993 1.8 1.4 3.2 3.0
1994 1.1 0.8 1.4 1.1
1995 0.6 0.7 0.9 1.4
1996 0.8 1.2 0.7 1.3
1997 1.2 1.3 1.0 1.8
1998 1.5 1.4 1.2 1.4
1999 2.2 1.4 1.6 1.4
2000 2.4 1.7 2.1 1.8
2001 2.7 2.3 2.5 2.3
2002 2.7 2.4 2.8 2.5
2003 2.5 2.3 3.1 2.5
2004 2.1 2.2 3.1 2.3
2005 2.0 2.0 3.0 2.3
2006 2.2 2.0 2.8 2.0
2007 2.6 2.3 2.8 2.1
2008 2.7 2.6 2.8 2.2
2009 2.4 2.6 2.7 1.6
2010 2.1 2.0 2.3 1.5
2011 1.8 1.8 2.0 1.7
2012 1.9 1.8 1.5 2.1
2013 2.0 2.0 1.2 1.8
2014 1.8 2.1 1.1 1.5

Figure 4 (b): Average wage adjustment-by jurisdiction, and inflation

Show data table: Average wage adjustment-by jurisdiction, and inflation
Figure 4 (b): Average wage adjustment-by jurisdiction, and inflation
Year Alberta British Columbia Inflation
1984 6.9 4.5 7.0
1985 3.3 2.4 4.7
1986 2.1 1.9 4.1
1987 2.4 2.0 4.2
1988 2.9 3.1 4.1
1989 3.2 4.9 4.5
1990 4.3 6.3 4.6
1991 5.1 6.3 5.2
1992 4.9 5.2 3.9
1993 3.1 3.6 3.0
1994 0.8 2.5 1.1
1995 -0.5 1.8 1.4
1996 -0.3 1.2 1.3
1997 1.0 1.1 1.8
1998 2.1 0.9 1.4
1999 3.1 0.9 1.4
2000 3.9 1.0 1.8
2001 4.6 1.9 2.3
2002 4.8 2.3 2.5
2003 4.2 2.2 2.5
2004 3.6 0.6 2.3
2005 3.0 0.1 2.3
2006 3.2 0.5 2.0
2007 3.8 2.1 2.1
2008 4.4 2.7 2.2
2009 4.7 2.8 1.6
2010 4.2 1.8 1.5
2011 3.4 1.2 1.7
2012 2.9 0.6 2.1
2013 2.3 1.1 1.8
2014 2.2 1.4 1.5

Wage adjustments, unemployment rate, and participation rate

When we compare wage adjustment data against two key labour market indicators-the unemployment rate and the participation rate-further patterns emerge (Figure 5). As unemployment rose and participation rates decreased, wage adjustments decreased. When unemployment decreased and participation increased, wage gains were higher. Unionized employees appear to have additional bargaining power when their labour is in higher demand and, therefore, have leverage to negotiate higher wages.

Figure 5: Average wage adjustment and labour market conditions Footnote 12

Show data table: Average wage adjustment and labour market conditions
Figure 5: Average wage adjustment and labour market conditions
Year Wage adjustment Unemployment rate Participation rate
1984 6.2 11.4 64.7
1985 4.0 11.3 65.1
1986 3.6 10.5 65.6
1987 3.7 9.6 66.1
1988 3.9 8.7 66.5
1989 4.5 8.0 66.9
1990 5.1 7.8 67.1
1991 4.8 8.6 67.0
1992 3.8 9.9 66.5
1993 2.1 11.0 65.9
1994 1.0 11.0 65.4
1995 0.6 10.4 65.1
1996 0.7 9.8 64.9
1997 1.1 9.4 64.8
1998 1.3 9.0 64.9
1999 1.8 8.3 65.2
2000 2.1 7.6 65.5
2001 2.7 7.2 65.7
2002 2.9 7.2 66.2
2003 2.9 7.5 66.8
2004 2.4 7.5 67.3
2005 2.2 7.2 67.4
2006 2.2 6.8 67.2
2007 2.7 6.4 67.2
2008 3.0 6.1 67.3
2009 3.0 6.8 67.4
2010 2.5 7.5 67.2
2011 2.0 8.0 66.9
2012 1.7 7.6 66.7
2013 1.6 7.3 66.6
2014 1.6 7.1 66.3

Work stoppages

There are at least four ways to assess the magnitude of labour disputes:

  • number of work stoppages
  • average number of stoppages per settled agreement
  • duration of stoppages
  • person days not worked (PDNW)

Number of stoppages

As the number of settlements has trended downwards since the mid-1980s, the number of work stoppages has followed a similar trend, although with significant annual variations (Figure 6). Because work stoppages most frequently happen during periods of bargaining, it is not surprising that in an environment of fewer settlements, there have been fewer work stoppages.

Figure 6: Number of settlements and work stoppages, all sectors

Show data table: Number of settlements and work stoppages, all sectors
Figure 6: Number of settlements and work stoppages, all sectors
Year Stoppages Settlements
1984 66.0 575.0
1985 61.3 577.7
1986 70.7 542.7
1987 69.3 515.7
1988 68.7 524.3
1989 61.3 491.0
1990 62.3 500.7
1991 56.3 502.3
1992 48.7 516.7
1993 35.0 520.3
1994 32.7 482.7
1995 31.0 451.3
1996 33.3 404.7
1997 34.3 386.7
1998 42.3 390.0
1999 50.0 390.3
2000 54.0 399.0
2001 47.7 405.7
2002 39.7 400.0
2003 33.7 381.0
2004 31.3 354.3
2005 34.7 382.7
2006 29.7 383.0
2007 26.3 362.0
2008 17.0 326.3
2009 19.7 313.7
2010 17.7 328.3
2011 18.0 315.7
2012 26.0 300.7
2013 24.7 349.0
2014 25.3 323.7

The number of work stoppages per settlement across all sectors has trended downwards since 1984 (Figure 7). Although there was yearly variation, the number of stoppages per settlement remained fairly stable in the public sector, but trended downward in the private sector. For most of the past 30 years, the average has been higher in the private sector. This discrepancy between the two sectors declined recently and the number of work stoppages per settled agreement is now at a similar level.

Figure 7: Number of work stoppages per settled agreement Footnote 13

Show data table: Number of work stoppages per settled agreement
Figure 7: Number of work stoppages per settled agreement
Year All sectors Public Private
1984 0.12 0.05 0.23
1985 0.11 0.05 0.19
1986 0.13 0.07 0.21
1987 0.13 0.08 0.21
1988 0.13 0.07 0.21
1989 0.13 0.08 0.19
1990 0.13 0.09 0.18
1991 0.12 0.09 0.15
1992 0.10 0.08 0.12
1993 0.07 0.06 0.08
1994 0.07 0.05 0.11
1995 0.07 0.05 0.11
1996 0.08 0.05 0.14
1997 0.09 0.06 0.12
1998 0.11 0.10 0.12
1999 0.13 0.13 0.13
2000 0.14 0.13 0.15
2001 0.12 0.12 0.14
2002 0.10 0.09 0.14
2003 0.09 0.07 0.13
2004 0.09 0.06 0.14
2005 0.09 0.07 0.14
2006 0.08 0.06 0.11
2007 0.07 0.06 0.10
2008 0.05 0.05 0.07
2009 0.06 0.06 0.07
2010 0.05 0.05 0.06
2011 0.06 0.06 0.06
2012 0.09 0.10 0.07
2013 0.08 0.08 0.08
2014 0.09 0.09 0.09

Duration of stoppages

Economists have argued that work stoppages tend to be longer during economic downturns than during boom periods (Brym et al, 2013, 230). During economic downturns, employers do not have an incentive to end a work stoppage. When the market is poor for a firm’s goods and services, management may not be in a position to increase wages and instead decide to wait out the union’s demands. In good economic times, employers are in a position to grant higher wages and also wish to avoid a lengthy strike when their products are in high demand.

The number of work stoppages tended to be pro-cyclical, while the average duration of work stoppages tended to be counter-cyclical. Canada experienced a recession in the early 1990s, and subsequently, the unemployment rate rose and remained elevated through the first half of the decade. During this period, the number of stoppages decreased, but the duration of stoppages increased (Figure 8). After the 2008-2009 recession, when unemployment rose again, the duration of work stoppages also increased. In contrast, during good economic times, workers were in higher demand and, therefore, had increased bargaining power. In such an environment, stoppages could be more costly, and as a result, their duration tended to be shorter.

Figure 8: Average work stoppage duration and unemployment rate

Show data table: Average work stoppage duration and unemployment rate
Figure 8: Average work stoppage duration and unemployment rate
Year Duration Stoppages Unemployment
1984 21.1 66.0 11.4
1985 20.1 61.3 11.3
1986 21.6 70.7 10.5
1987 19.4 69.3 9.6
1988 19.0 68.7 8.7
1989 15.7 61.3 8.0
1990 18.0 62.3 7.8
1991 15.3 56.3 8.6
1992 16.6 48.7 9.9
1993 13.4 35.0 11.0
1994 17.7 32.7 11.0
1995 19.1 31.0 10.4
1996 22.3 33.3 9.8
1997 20.1 34.3 9.4
1998 19.0 42.3 9.0
1999 16.5 50.0 8.3
2000 14.8 54.0 7.6
2001 14.3 47.7 7.2
2002 17.7 39.7 7.2
2003 23.1 33.7 7.5
2004 24.6 31.3 7.5
2005 24.2 34.7 7.2
2006 20.6 29.7 6.8
2007 22.0 26.3 6.4
2008 20.5 17.0 6.1
2009 27.1 19.7 6.8
2010 24.6 17.7 7.5
2011 31.1 18.0 8.0
2012 21.9 26.0 7.6
2013 22.3 24.7 7.3
2014 11.9 25.3 7.1

Person days not worked (PDNW)

Over the past 30 years, although the number of PDNW Footnote 14 was trending downwards, there have been several periods of time when pdnw were elevated among employers covered by provincial jurisdictions. in contrast, in the federal jurisdiction pdnw remained fairly stable, with the exception of the years 1987-1992 and 2004-2008 (Figure 9).

Figure 9: Person days not worked, by jurisdiction

Show data table: Person days not worked, by jurisdiction
Figure 9: Person days not worked, by jurisdiction
Year Federal jurisdiction Provincial jurisdiction
1984 69.5 2954.8
1985 97.9 2089.5
1986 153.8 2964.1
1987 302.5 2840.3
1988 847.9 2976.6
1989 829.7 1829.4
1990 674.9 2355.5
1991 365.9 2017.3
1992 324.2 1715.3
1993 304.2 728.1
1994 25.2 768.4
1995 96.9 646.0
1996 120.7 1284.1
1997 260.8 1850.3
1998 200.2 2123.7
1999 341.9 1623.3
2000 203.4 1069.7
2001 260.4 901.2
2002 247.2 1202.6
2003 280.3 1268.5
2004 602.2 1313.1
2005 929.6 1443.1
2006 869.7 1230.8
2007 510.4 1205.8
2008 60.5 530.6
2009 79.4 892.5
2010 50.0 706.9
2011 163.4 835.7
2012 166.3 521.5
2013 164.9 621.3
2014 24.3 845.8

Since 1984, PDNW as a percentage of the total days worked remained at or below 0.6% and trended downwards (Figure 10). The percentage was highest in the late 1980s and has hovered around 0.1% since 2008.

Figure 10: Person days not worked as a percentage of total days worked Footnote 15

Show data table: Person days not worked as a percentage of total days worked
Figure 10: Person days not worked as a percentage of total days worked
Year Per cent
1984 0.52
1985 0.37
1986 0.51
1987 0.50
1988 0.59
1989 0.40
1990 0.44
1991 0.35
1992 0.30
1993 0.16
1994 0.12
1995 0.11
1996 0.20
1997 0.30
1998 0.33
1999 0.27
2000 0.17
2001 0.15
2002 0.19
2003 0.20
2004 0.24
2005 0.29
2006 0.26
2007 0.21
2008 0.07
2009 0.12
2010 0.09
2011 0.12
2012 0.08
2013 0.09
2014 0.1

Key observations

  • The number of collective agreements settled per year decreased steadily since 1984. Three factors may explain this decrease: a decreasing rate of unionization; mergers between unions; and longer contract durations;
  • Between 1984 and 2014 the average duration of contracts increased from less than two years to over 3.5 years. Factors influencing contract duration include efforts to control costs associated with frequent bargaining and a legislative climate that encourages longer contracts;
  • When inflation was high, wage gains tended to increase and vice versa. Unions negotiate wage adjustments both to catch up to increases in inflation and to ensure that wages do not fall behind the rate of inflation over the length of their contracts;
  • During periods of high participation rates and low unemployment, wage adjustments tended to be higher, reflecting increased bargaining power when workers are in greater demand;
  • The number of work stoppages per year trended slightly downward since 1984, due primarily to the decreasing number of settlements;
  • The number of work stoppages tended to be pro-cyclical while the duration of work stoppages was counter-cyclical;
  • The number of person days not worked trended downwards since 1984, while in the federal jurisdiction, it remained fairly stable; and
  • As a percentage of total days worked, person days not worked ranged from a high of 0.6% in the late 1980s to a low of 0.1% over the past seven years.

Bibliography

Brym, R., Birdsell Bauer, L., & McIvor, M. (2013). “Is Industrial Unrest Reviving in Canada? Strike Duration in the Early Twenty-First Century.” Canadian Review of Sociology, 50 (2), 227-238.

Dodge, David., & Fray, Robert. (2003). “Low and Predictable Inflation and the Performance of Canadian Labour Markets.” Lecture by David Dodge, Governor of the Bank of Canada to the Memorial University of Newfoundland. St. John's: Bank of Canada. www.bankofcanada.ca/wp-content/uploads/2010/01/sp03-16.pdf (accessed April 10, 2015).

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