Canada’s leading business organizations are expressing deep concern with the looming possibility of a strike by the Air Line Pilots Association (ALPA) at Air Canada.
In a letter to Steven MacKinnon, federal Minister of Labour and Seniors, the organizations said the potential for a labour disruption is alarming, given the wide-reaching implications it would have on Canadians, the nation’s economy, supply chains, and our global reputation.
“Air Canada provides a crucial service, carrying up to 150,000 passengers each day. Be it a business trip, seeking medical treatment, visiting family and friends, or a long-awaited vacation, reliable long-range transportation is non-negotiable for Canadian travellers,” it said.
“However, the impact of a strike would extend far beyond passenger travel for both urban and rural Canadians—it would significantly disrupt Canada’s supply chain. Air Canada’s cargo network is important for the import and export of critical, time-sensitive goods such as vaccines and medical supplies, agriculture and perishable food products, and parts and machinery for small and medium sized Canadian manufacturers. For example, radioactive isotopes, which are crucial for cancer treatments, are shipped via Air Canada Cargo domestically and internationally due to their 48-hour lifespan. A disruption in this service, however short, would be devastating, as no other means of transport can meet the stringent time requirements for these products.”
“The timing of this potential strike could not be worse. The dust has not yet settled on the labour disputes that paralyzed Canada’s two major rail networks, causing yet untold damage to not only our national economy, but also our global reputation. It was another example of a disturbing trend—labour disputes, and threat of them, have disrupted operations at the ports of Montréal and British Columbia, the St. Lawrence Seaway, as well as at WestJet and the Canadian Border Services Agency this past year alone. If Canadian businesses are unable to deliver our goods to market on time, our international partners will begin to seek permanent alternatives.”
The organizations said the federal government needs to take decisive action. The impacts of a labour disruption at Air Canada will ripple throughout the economy, affecting Canadian consumers, employees, and businesses. A work stoppage will lead to thousands of temporary layoffs for airline employees, which will negatively impact the air transportation ecosystem across the country. It will reinforce a growing perception that Canada is not a reliable trading partner.
Beyond passenger services, air cargo is a vital component of Canada’s export economy, ensuring the timely delivery of goods, including medical supplies, agricultural products, and critical parts for manufacturers. A labour disruption would be catastrophic for industries reliant on just-in-time delivery systems, said the organizations.
“Canada cannot afford another major disruption to its transportation network. A labour disruption at Air Canada would ripple through our economy, from tourism to critical supply chains. The federal government must be prepared to intervene if necessary,” said Goldy Hyder, President and CEO of the Business Council of Canada.
“Canadians and businesses nationwide are going to suffer the consequences of labour disruption in the air travel industry. They are not at the negotiating table and are powerless to control the outcomes. We need proactive, decisive action from all actors and from the federal government to ensure we can avoid more damaging consequences for everyone,” said Candace Laing, President and CEO of the Canadian Chamber of Commerce.
“Quebec companies risk being hit with another labour disruption they cannot afford. A labour disruption at Air Canada would have severe consequences for our businesses across Quebec, particularly in sectors such as manufacturing, tourism, and exports. We depend on reliable air transportation to move goods, materials, and people. Even a short disruption would lead to costly delays and further strain our supply chains. The federal government must intervene to ensure Quebec businesses can continue to thrive and remain competitive in both domestic and international markets,” said Karl Blackburn, President and CEO of Conseil du patronat du Québec.
“The economy is already fragile after recent disruptions in our transportation networks. Another labour dispute would further damage Canada’s standing as a reliable global trading partner. The government must act promptly to help protect small businesses across the country,” said Dan Kelly, President and CEO of the Canadian Federation of Independent Businesses.
“Thousands of Canadians are relying on flights for critical business, healthcare, and personal reasons. Even a brief suspension will leave many stranded and further strain an already stressed tourism industry,” said Andrew Siegwart, President and CEO of the Tourism Industry Association of Ontario. “We need the federal government to show leadership and intervene before it’s too late. Another disruption in the transportation sector will reverberate across the country and hurt businesses, employees, and travellers alike.”
Gary Newbury, a retail supply chain and last mile expert, a Rethink Retail’s Top 100 Retail Influencer and CITT’s Innovator Award 2020, said the threat of yet another strike within our domestic transportation and supply chain infrastructure is a major concern in a number of areas.
“If you are an international shipper looking to support the Canadian market (including businesses shipping from the US), you are doubting the resilience of Canadian supply chains (with the recent rail strike disruption last month, amongst others). If you are a shipper to the significant US market east coast ports, and desperately seeking help from Halifax and Montreal (to avoid labour disruptions which looks highly likely on 30th September), there’s both a capacity constraint (due to be resolved by the end of 2024) and ongoing challenges with labour relations at PoM, and now, even if you are within the Canadian market, you are likely to have headaches trying to find Air Transportation alternatives with the main couriers such as UPS, Purolator and Fedex,” he said.
If it’s not ports, it’s rail, if not rail, it looks like air transportation. We can rule out trucking as we discovered as recently as two to three weeks ago, our surge capacity is very limited.
“Our reputation as a market that has high risk of labour disruption affecting business accessing urban to remote territories, transportation is starting to look very weak indeed.
“In terms of this particular threat (Air Canada pilots), some pharma companies I have spoken to recently have already been switching modes from air to sea. With alternatives like the major integrators (DHL, Fedex and UPS), many B2B shippers will have been exploring options in this area or using whatever trucking capacity they can find. Spot rates are set to rise sharply.
“This leaves the impact on passenger transportation. Although much progress was made during the restrictions of doing business over video conferencing, there are still many areas which require face to face activities, moving vital organs, patients and medical supplies around the country, as well as movement within Canada by consumers and between Canada and other countries which is now at serious risk. The tourism and hospitality industries here are set for what could be a significant short term disruption.”
Will the government apply the same approach as they did with rail and avoid labour disruption by forcing any unresolved negotiations into binding arbitration?, he wondered.
“It seems fairly certain this “tool” will be used once again to make an intervention between a commercial organization and its workforce. With the cooperation agreement dissolved, the federal government will be free to force workers back to work. This tool will continue to be used to quell labour disruption, until it is successfully challenged by the rail union as an impingement to their right to freely negotiate. If that legal challenge is successful, it will likely determine the ultimate commercial risk classification of Canada.
“Unfortunately, we are in the hands of both Air Canada and its union leaders to continue to negotiate in good faith and avoid a major supply chain disruption. What we are likely to see, much as we saw with CN/CPKC, is the withdrawal of capacity by Air Canada to avoid their equipment, passengers and crew being “out of position” immediately ahead of the strike, so they can resume scheduled services once any strike action has been resolved. So we are set for a challenging week, or more.”
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