New signs of wage inflation may force Bank of Canada's hand in raising rates
CBC
Like its counterpart in the United States, the Bank of Canada has said it hopes to slow inflation before large price rises become embedded in the expectations of workers and businesses.
But recent examples of not just wage demands, but actual negotiated long-term contracts, seem to hint that early signs of wage inflation may have already begun to emerge in the Canadian labour market.
"Sobeys warehouse workers have negotiated massive wage increases, improved pensions and wage parity for part-time workers in a new four-year collective agreement," crowed Unifor, the union that represents the Sobeys employees, in a release last Thursday, declaring a 19.5 per cent wage increase over the life of the agreement.
While it can be argued that's just keeping up with the rising cost of living, wage increases are also one factor the Bank of Canada is watching as it considers when and how much to raise interest rates to battle inflation.
While data from December's Labour Force Survey showed average wages up 2.7 percent over the past year, the increase gained by the Sobeys workers is closer to five per cent a year for the next four years.
That compares to the latest inflation indicator that showed consumer prices rising at an annual rate of 4.8 per cent, a thirty-year high.
Economists looking out for signs of wage inflation will get the latest earnings data from Statistics Canada on Friday in the January jobs report. Overall, economists are predicting that the Canadian economy will lose something in the order of 100,000 jobs this time after repeated gains.
Omicron, the latest COVID-19 variant, is to blame, Royal Bank economist Dawn Desjardins told CBC News.
Exactly how that would affect wage data is hard to read because in the past low-wage jobs have been the worst affected by lockdowns, skewing the data in favour of higher wages.
WATCH | Job growth in November leaves employers looking for talent:
"Unifor achieved significant pay hikes over the life of this agreement, including substantial raises that workers will see immediately," said Unifor National President Jerry Dias last week, but Canada's biggest private sector union is not alone in trying to catch up with rising inflation and past low wage gains.
In the case of the union representing journalists at the news service owned by the Canadian media conglomerate Thomson Reuters, the Reuters Guild is demanding a wage hike of eight per cent, saying they have not had a raise since 2020 and comparing that to the staggering returns of the family that owns the business.
The Reuters Guild says it wants "to make up for years of wage stagnation and inflation — while company profits soared and the family of Chairman David Thomson's wealth grew by $8 billion."
Other unions across the country are looking for increases as their members watch spending power shrink in the face of rising prices for essentials including housing, food and fuel.
Commuters hoping to escape the cold by travelling on Line 6 will need to think again, as train service is down Friday morning.
Halim Rahim has lived in Canada for almost four years, but says he’s never experienced a winter like this.
For Lindsay Gillan, walking her dog, Daisy, twice a day in Charlottetown’s Victoria Park is a treasured routine that benefits both her physical and mental health.
Whitehorse city council has postponed its decision on an overhaul of its zoning bylaws that would, among other things, introduce short-term rental regulations in the city.
Prime Minister Mark Carney says he has reached a deal with China to allow tens of thousands of Chinese electric vehicles into the country in exchange for lower canola duties.
The Federal Court of Appeal is expected to give its decision Friday morning on whether the Liberal government unlawfully invoked the Emergencies Act to clear the convoy protests that gridlocked the capital city and border points nearly four years ago.
WARNING: This article describes allegations of sexual assault.
The average time for a 911 caller to connect with an operator is down to three seconds so far this year, according to Toronto police.
Emergency crews across southwestern Ontario kept busy on Thursday, responding to dozens of collisions, as a steady stream of snow squalls blanketed the region with as much as 30 centimetres of snow, prompting widespread school closures.
Woody Point — a picturesque community on Newfoundland's west coast — is reeling after the loss of what was a pillar of local business in the town for over 70 years.
A New Brunswick Mountie testified he punched a woman in the face twice, but only because she had punched him while he tried to arrest her.
The City of Winnipeg is halting work to clean up the Manwin Hotel site following a Wednesday fire, after officials determined there was asbestos in the rubble.
A Saskatoon judge has now heard about the hours just before and after Taya Sinclair's death.