A pandemic juxtaposed with inflation has left its share of consequences. Some of them are original, such as telework. Others are deplorable, such as the rise in industrial absenteeism.
Due to a lack of sufficient manpower, the production of companies has collapsed, causing disruptions in supply chains. These disturbances have boosted in turn driving inflation to hitherto all-time highs. Seeing an important part of its freedom to consume slip away from it, the middle class is frightened.
From then on, workers’ anger is on an upward path. Many collective negotiations are stuck between union wage demands and corporate survival plans. Faced with a skyrocketing cost of living, trade unions are increasing their wage demands in order to offset the effects of inflation. And as if all this were not enough, there is also a shortage of labor resulting from a generational transfer. Young people are not in sufficient numbers to replace the departures of the boomers, who have not reproduced the family sizes that gave birth to them.
Inflation is a source of revenue for the state because of progressive, even aggressive taxation. Thus, since the meteoric rise in real estate prices, municipalities have relished the cash inflows that their so-called “welcome” or property taxes provide them. The Government of Quebec is not left out. For example, in terms of income tax, what exceeds $104,000 per year is reduced by half in Quebec (including federal taxation). But inflation pushes wages up. Goods and services taxes are added. Thus, the Government of Quebec is recording additional revenue, i.e. $2.8 billion for the 2021-2022 fiscal year and $3.4 billion for the 2022-2023 fiscal year. While governments get away with it, workers no longer know which god to invoke in the face of the collapse of their personal finances. Finally, the Bank of Canada raises its key rate to curb inflation. In the workers’ view, all this is a disaster in the face of mortgage renewals or food products that reach extraordinary prices.
So, for reasons beyond their control, workers and managers are on edge. Employees become impatient. Moreover, caught in the trap of labor shortages, the bosses are wary of an intransigence on the part of the workers which could place their company in danger. But the latter want wage valuations capable of compensating for inflation. As a result, collective bargaining slows down or literally stalls. Strike mandates abound.
In the public sector, a union common front uniting the three main labor centers in Quebec has taken root. This circumstantial association represents approximately 400,000 workers out of a total public workforce of approximately 580,000 workers (health, education, ministries and their agencies), excluding municipal employees. The financial stakes are therefore colossal. The Quebec budget was 298 billion in 2022. Half of this sum, or approximately 150 billion dollars, constitutes the payroll of the aforementioned budget. Consequently, each slice of 1% in wage increase, for the whole of the public workforce, represents a state expenditure of approximately 1.5 billion dollars. Then arises the difficult balance between the cost of the working conditions of civil servants or para-civil servants with the level of citizen taxation.
The rate of unionization in Quebec, all industrial sectors combined, reached 40% of the active force. In the public sector, union density fluctuates at 80%. Clearly, the vote of union members counts more in Quebec than in other Canadian provinces where union density is lower. The extent of state services juxtaposed with union penetration quickly politicized collective bargaining in the Quebec public sector.
Moreover, in the private sector, situations fluctuate depending on the industry. Where salary costs are low relative to turnover, salaries are excellent. This is the case in the aluminum or petrochemical industry. However, the situation is difficult if the share of wages in the overall budget of companies is high or if raw materials are inaccessible. Several of them simply file for bankruptcy and the employees are then ostracized.
To date, the Government of Quebec has handled certain negotiations quite well, such as those between engineers and state lawyers. As for the main collective agreements in the Quebec public sector, they will expire on March 31, 2023. The past shows that negotiations to renew them can take time. Ideally, trade unionism benefits from confronting the state with the last year of its mandate. However, provincial elections are scheduled for 2026.
At the limit, the hidden issue of future collective negotiations between the State and the union common front is nothing less than the survival of the social charter already decked out by service disruptions. As for the private sector, it offers a vast diversity of situations ranging from the worst to the best. Whether in the public or private sector, quality social dialogue between employers and unions is essential. Future collective bargaining must be inspired by systemic thinking sensitive to the development of artificial intelligence that will transform the organization of work. This issue is of considerable strategic importance. It calls for responsible and reasoned social dialogue.