Specter of a strike | Air Canada requests unprecedented intervention from Ottawa

Air Canada is seeking unprecedented intervention to avoid grounding its planes, it has learned The PressThe company is asking Ottawa to impose binding arbitration even before the strike of its 5,400 pilots – which could be triggered as early as September 18.

The request is contained in a lengthy 10-page letter sent on September 7 to federal Labour Minister Steven MacKinnon, as the chances of an agreement between the country’s largest air carrier and the International Air Line Pilots Association (ALPA) appear to be diminishing.

Air Canada is urging the minister to turn to the tool – section 107 of the Canada Labour Code – that helped end the labour dispute that paralyzed the country’s two largest railways last month, before adding another suggestion.

“We note that ministerial intervention under section 107 generally occurs only after a work stoppage,” it reads. “We respectfully consider that in this case, it would be appropriate not to follow this practice.”

In other words, the Montreal-based airline is asking Mr. MacKinnon to go even further than the exceptional gesture he made by intervening to end the paralysis of activities at the Canadian National Railway Company (CN) and Canadian Pacific Kansas City (CPKC).

Under section 107 of the Code, the Minister may request the Canada Industrial Relations Board (CIRB) – an independent administrative tribunal – to take whatever steps it considers necessary to resolve an impasse.

In the case of the two rail carriers, Mr. MacKinnon had waited until the start of the labour dispute before intervening. This approach by the Trudeau government is nevertheless being contested in Federal Court.

For lawyer Marc Boudreau, of the firm Marceau & Boudreau, specializing in labor law, Air Canada’s request constitutes a “dangerous” precedent.

“Section 107 was supposed to be an exceptional power of the minister and it seems that they want to make it the norm,” he believes, recalling that the Supreme Court of Canada ruled that the right to strike is protected by the Canadian Charter. “It is up to the minister to decide whether he wants to be the puppet of our employers in Canada. If he lets it happen, he will be used as an instrument.”

However, a coalition of organizations representing business people across the country, including the Canadian Chamber of Commerce, want to see Minister MacKinnon intervene in the matter. On Wednesday, they released a letter that was forwarded to him.

“The federal government must act decisively to prevent a work stoppage at Air Canada,” they write. “The consequences of such a work stoppage would affect the entire economy, affecting consumers, employees and Canadian businesses alike. A work stoppage would result in thousands of temporary layoffs for the airline’s employees and will have a negative impact on the air transportation ecosystem across the country.”

Money Matters

The negotiations between Air Canada and ALPA are mainly stumbling over salary issues. The pilots’ last collective agreement was ratified in 2014 and provided for annual increases of around 2%.

ALPA is pushing for a pay catch-up, drawing inspiration from the United States, where recent increases for airline pilots at companies like Delta Air Lines, United Airlines and American Airlines have ranged from 34% to 40%.

The Press reported on September 4 that Air Canada had offered pay increases totaling 30% by 2027 in an attempt to resolve the impasse. According to our information, there would be an immediate 20% increase in pilots’ salaries.

Given the uncertainty, the maple leaf carrier could cancel flights as early as Sunday, which would also affect its subsidiary Air Canada Rouge.¹.

A hundred meetings

The two sides have been negotiating for more than a year. In its letter, Air Canada says it has had nearly 100 meetings with the union over the past 14 months. In addition to the disruption to travellers, which could have an economic impact on Canada, the company says a shutdown would deprive many workers of their livelihoods.

“A work stoppage could have repercussions on other union units, or even on the employees of our suppliers […] who could be laid off,” the letter argues.

If Air Canada and Air Canada Rouge planes are grounded, 128,000 passengers a day from coast to coast could be affected, according to data provided by airline industry data firm Cirium.

The company represents nearly 45% of capacity in the Canadian industry.

Negotiate

The Trudeau government continues to urge the parties to reach an agreement.

While in Nanaimo, British Columbia, where Liberal MPs were meeting in caucus to prepare for the return of Parliament on Monday, Mr. MacKinnon maintained that there was “no reason” preventing the union and the employer from reaching a formal agreement.

“Agreements are made at the negotiating table,” he said. “Air Canada and the union must do the necessary work to obtain a solution that is acceptable to both parties.”

Asked about a possible work stoppage at Air Canada, Conservative Party leader Pierre Poilievre said he was opposed to any strong intervention by the Trudeau government in this matter, such as the adoption of a special law or the imposition of binding arbitration.

“To impose an end to the negotiation now would be ridiculous and we would not tolerate that,” Mr. Poilievre said during a press scrum in Ottawa.

The Conservative leader said Air Canada pilots have every reason to be “frustrated” with their pay conditions and called on Air Canada to negotiate in good faith.

“It’s ridiculous that our pilots are paid much less than Americans. Pilots in the United States, they are paid much more. In addition, they pay much less taxes,” he argued.

With the collaboration of Mélanie Marquis, The Press

1. Read “What to Know in Uncertain Times”