Business Groups Request Binding Arbitration to End Air Canada Labour Dispute

Air Canada planes at Pearson International Airport on April 28, 2021. The Canadian Press/Nathan Denette

Over 70 business groups have written a letter to Labour Minister Steven MacKinnon asking him to stop Air Canada pilots from striking by imposing binding arbitration to bring the labour dispute to an end.

“The federal government needs to take decisive action,” the business groups said in a Sept. 11 letter. “The impacts of a labour disruption at Air Canada will ripple throughout the economy, affecting Canadian consumers, employees, and businesses.”

The groups, which include the Canadian Chamber of Commerce, Food Producers of Canada, and Mining Association of Canada, said they have “deep concern” about the possibility of a strike by the Air Line Pilots Association (ALPA), a union that represents 5,200 pilots.

On Sept. 9, Air Canada said it was finalizing plans to suspend most of its operations as talks with the ALPA stagnated. The airline said ALPA could issue a 72-hour strike notice on Sept. 15, or the airline could announce a 72-hour lockout.

ALPA has accused Air Canada of “taking shots at the professional pilots who safely transport their passengers” while giving pilots below-market compensation. Air Canada says the union’s wage demands “far exceed average Canadian wage increases.”

A shutdown would affect Air Canada’s 110,000 daily customers and nearly 670 daily scheduled flights. According to Transport Canada, Air Canada accounted for 51 percent of all available seat-kilometres in the domestic air market in 2022.

The business groups warn that a labour disruption would have “wide-reaching implications” on Canada’s economy, supply chains, and global reputation. In addition to interrupting travellers, the impact on Air Canada’s cargo network would harm Canada’s exports of medical supplies, agricultural products, and parts and machinery for Canadian manufacturers, they said.

The timing of an Air Canada strike could also “not be worse,” they said, given the recent labour disputes involving Canada’s rail networks. A recent nationwide strike by Canadian National and Canadian Pacific Kansas City—which was triggered after contract negotiations between the companies and the Teamsters Canada Rail Conference failed—came to an end on Aug. 22 after Ottawa imposed binding arbitration.

The groups said the government should “prioritize Canadians” by again referring the matter to binding arbitration if the airlines and its pilots can’t come to an agreement.

‘Very Optimistic’

MacKinnon said on Sept. 10 that he was “very optimistic” that the two sides could reach a deal, adding that they had been negotiating for several months and made progress on several issues.

“There is absolutely no reason these parties cannot come to a negotiated agreement, and my position is that they should do the work necessary to relieve Canadians of the considerable uncertainty that this causes,” he said.

MacKinnon did not say whether Ottawa would move to binding arbitration to end the dispute, saying the government has a “commitment to collective bargaining.”

Ahead of the rail strike last month, the government said it wanted the dispute to be resolved at the negotiation table and wouldn’t intervene. However, the government stepped in once a lock out was announced, and imposed binding arbitration to get trains moving again.

Transport Minister Pablo Rodriguez also told reporters on Sept. 11 that it’s “very important” that the two sides reach an agreement, as there are 90 destinations in Canada that are served only by Air Canada.

“They are at the table negotiating. It’s extremely important for our government and all Canadians that they reach an agreement.”

During a Sept. 11 press conference, Conservative Leader Pierre Poilievre called on Air Canada to “negotiate in good faith” with the pilots. He also said there is pay disparity with American pilots, which he attributed to “government-caused inflation.”