By Howard Levitt 

It’s not just passengers affected but air cargo, food, medical supplies and essential equipment

With Air Canada pilots poised to strike, the NDP has abrogated its supply and confidence agreement with the Liberals and announced that it will not support back-to-work legislation. With the Conservatives making a play for organized labour and anxious to trigger an election, it is unclear how far they will go this time, assuming Prime Minister Justin Trudeau, fearful of the political winds and increasingly desperate to avoid the electorate, decides to have the minister of labour order them back to work as they did with the railway workers.
Air Canada carries up to 110,000 people a day, some travelling for health care, others for business. This writer is booked on Air Canada for business twice this coming week alone. With September a critical month for events and conventions which make up 40 per cent of our tourist economy, even a short strike could be catastrophic for already struggling businesses and communities reliant on visitor spending.

It is not just passengers affected but air cargo such as food, medical supplies and equipment needed to keep machinery and industry operating. Radioactive isotopes used for cancer treatment have a 48-hour lifespan and are shipped on Air Canada Cargo.

The potential pilots’ strike comes weeks after a labour dispute briefly put our two major rail networks out of commission.

The labour relations reality? When any company goes on strike, its customers look for more reliable suppliers, who often insist on long-term supply agreements so that they do not lose that new customer as soon as their strike ends. The risk is that when the strike ends, the company has lost much of its customer base and its survival is in question. Something similar applies here, but it isn’t just Air Canada that could take a hit. Every company reliant on our biggest carrier will become, to various extents, at risk.

Air Canada pilots are looking to match their U.S. counterparts and seek a hefty increase to their current wages. But our environment is not the same as the one in the U.S. If Air Canada acceded to those demands and had to raise their (already high) ticket prices accordingly, it would hurt all businesses that use the airline and could push air travel out of reach for some Canadians. It might also require Air Canada to eliminate less profitable regional routes and secondary airports.

It’s not as if Air Canada pilots are doing poorly. They are already close to or in the top one per cent of Canadians, with Air Canada captains earning  between $215,075 and $351,958 in 2023, depending on the type of aircraft, for usually about 12.5 days worked per month. In addition to those wages, they have comprehensive benefits including the increasingly rare defined benefit pension plans and travel packages continuing after retirement. Not many Canadians have it that good and, for some perspective, they earn dramatically more than the average member of my profession while working considerably fewer hours.

Since their last agreement in 2014, Air Canada pilots have had an hourly wage increase of 65 per cent, more than double the CPI of 29 per cent. The number of pilots has close to doubled over the last 10 years as well and, for all their complaints about higher U.S. pilot wages, the attrition rate to U.S. airlines is under .05 per cent annually.

It is not as if Air Canada has been parsimonious in these negotiations, offering a 30 per cent increase in a three year agreement, 20 per cent in the first year.

They have been negotiating since June 2023, went through mediation with respected mediator Bill Kaplan earlier this year and have had federal conciliators since then.

Although Air Canada is private, a labour stoppage would be more like a public sector strike. In a private sector strike, market discipline prevails. If the union asks for too much or strikes for too long, the company will go out of business, rendering all of the union members unemployed. So the union and company have a joint interest in not asking for too large of an increase. And the only parties affected are the parties themselves. But in a public sector strike, those affected include the members of the public. Air Canada is also not likely to go out of business (although some airlines do) because it has little competition and it takes too long for other airlines to obtain licenses to operate on its routes.

When those suffering are not primarily the parties but, in this case, third parties — public travellers, business travellers, businesses reliant on supplies and the entire tourism sector — that is precisely when we require government to intervene, as it did in the recent railway strike.

But with Trudeau fearing an election call, order the pilots back to work and imposing binding arbitration to determine appropriate wages might not happen, a casualty of the latest shenanigans on Parliament Hill. And Canadians will be worse off.