(Bloomberg) -- About 120,000 workers in Canada’s federal public service ended a strike after the government of Prime Minister Justin Trudeau agreed to wage increases of about 12% over four years.
The Public Service Alliance of Canada made the announcement early Monday. The walkout, which began April 19, had sidelined workers who do an array of jobs including product inspection, administration in government departments, and passport and immigration applications.
Demands for wage increases after the recent period of high inflation were the main issue between the government and its employees, though an effort to enshrine the remote work arrangements also proved contentious. The government had been offering a 9% wage increase over three years.
The new agreement “requires managers to assess remote work requests individually, not by group” and provide reasons for their decisions in writing, the union said.
The compensation gains may add to upside risks that wage growth and inflation expectations stay elevated in Canada, especially if they prompt private-sector workers to also demand more money from their employers. While the Bank of Canada expects yearly inflation will fall to 3% in coming months, policymakers have spoken at length about the difficulties of getting it all the way back to the 2% target because expectations, services prices and wage gains all remain high.
Union members are also eligible for a C$2,500 ($1,842) one-time payment, in addition to the salary increases.
On remote work, the government was wary that granting too much flexibility would set a precedent for other industries that could cause a further hit to cities already contending with depressed foot traffic compared with before the pandemic.
About 35,000 workers for the federal tax agency, who have been looking for a larger wage increase, haven’t yet reached a deal and are still on strike. Monday is the annual deadline in Canada for filing personal income tax.
(Updates with more context on inflation beginning in fourth paragraph)
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