Wages trends in collective agreements

​Labour Canada forecast an average 1.8 per cent increase of base wages in major collective agreements negotiations scheduled for 2015. So far the increase has averaged 1.9 per cent. While this increase is higher than price increases so far this year, it could be slightly below inflation over the life of the agreements, which average almost four years.

With the exception of Ontario, negotiated wage increases so far have been highest in the east and lowest in western provinces, as forecast (see Figure 1). Base wage increases in BC have averaged just 1.1 per cent so far this year, slightly below Ontario’s average of 1.2 per cent. Moving east, wages rise, up to an average of 2.3 per cent in Nova Scotia (see table below).

By sector, base wage increases are forecast to average just 1.6 per cent for education, health and social services, 1.9 per cent for public administration, and up to 2.7 and 3.0 per cent for workers in utilities and primary industries. These wage forecasts were developed before oil prices plummeted earlier this year. The oil price decline will undoubtedly reduce wage settlements in primary and associated industries.

While wages continue to be a top priority in bargaining, major public sector negotiations are being held up by employers insisting on significant concessions over non-wage factors. For instance, the federal government is legislating sick leave provisions. The Ontario government is pushing to increase class sizes and control teachers’ non-classroom time.

Inflation rising again, fuelled by food price increases

Oil prices have gradually climbed back to $60 per barrel in the past few months, and with rising gas prices, inflation has also nudged up from the one per cent rates recorded at the beginning of 2015. The forecast for inflation this year is slightly below one per cent, but if oil and gas prices continue to climb, it will be higher. The lower Canadian dollar is pushing up consumer prices for imported goods, most immediately for food, clothing, and footwear. All these goods have increased at more than twice the overall rate of inflation in recent months.