Decoupled: Wages and CPI are on a break from one another.

CPI and Wages: With CPI trending between 3.1% and 3.7%, are wages following suit? The answer is no. 

CPI is inflated due to:

  • disruption in energy transition, 
  • increased government spending,
  • cash injections from the Bank of Canada, and 
  • pandemic shifts, 

all of which increase the risk for employers and do not translate to job creators being able to afford increased wages for their employees.

The increased business risk driving increased CPI has significant implications for wage adjustment considerations and collective agreement negotiations.

The path of least resistance, and at times lazy approach labour relations and human resources practitioners take when considering wage adjustment, is blindly following CPI increases. That is precisely the type of thinking that reduces the confidence executive leadership has in labour relations and human resources personnel and reduces their usefulness and effectiveness to the organization.

Wages and collective agreement targets must be driven by fulsome reviews of such adjustments’ affordability, sustainability, and prudence. This analysis and determination must ensure that operations and employment continues to be a going concern, presently and into the future.

CPI and wages are not automatically linked, nor should they be. Human resources and labour relations practitioners would be wise to test the business fundamentals before making promises they can’t keep with their union counterparts. Granting unsustainable wags increases helps no one if it results in shrinking operations and layoffs.

Please visit our home page or our news and knowledge centre for more information.

Respectfully submitted,

Sam Kemble

Executive Operating Officer

With People Inc.

(780) 886-1679

[email protected]

Alberta Labour Wage Settlements and Negotiations Update -Q1 2022

Alberta Labour Wage Settlements and Negotiations Update -Q1 2022

The Current Economic Environment Introduces Head-Scratcher Interactions at Collective Bargaining Tables

Several economic pushes and pulls create head-scratcher moments at collective bargaining tables as negotiators assess:
  • where the fair deal resides, and
  • how best to communicate that to rank and file members.
This phenomenon presents unique challenges for negotiations conducted by human resources and labour relations practitioners, and union leadership.

Oil’s Influence on Negotiations

Oil prices soften to $100.28, and the WCS price differential increases to $11.90/barrel. Alberta’s overall economic activity is up 4.5% year over year, bouncing somewhat from 2019 and 2020 depressed levels. Overall, these factors send positive messages to negotiators currently in collective bargaining.

Employment Impact on Collective Bargaining

Unemployment decreased to 6.8%, with a 69.4% labour market participation rate and 1.1% population growth yearly. While, on the surface, negotiators view this as a positive trend in collective bargaining, they need to realize there is significant displacement within the labour market. 

Inflation and Negotiations

Those engaged in collective bargaining must realize that inflation pressures are not the result of a growing, healthy economy. Instead, it is the result of commodity pressures, supply chain issues, government policy, regulation, taxes and spending. All of which increase the risk profile for employers.

Earnings, Average Wages and Collective Bargaining

Average weekly earnings are up 3%. A significant portion of that increase results from overtime and not hourly wage increases. Average hourly wages remain unchanged (0% increase) year over year.
The split between earnings, CPI/inflation, and wage rates present an inconvenient truth for negotiators currently engaged in collective bargaining. Now is not the time for a significant wage increase, except for perhaps the lowest earners – to offset growing costs of essential expenses.

Collective Agreement Negotiations

So how have negotiators at collective bargaining tables responded? Alberta’s February Bargaining Update shows 2022 settlements averaging 0.91%, 2023 settlements averaging 1.87%, and 2024 settlements averaging 1.70%.

The gap between inflation and wages is symptomatic of a great deal of increased risk, unfriendly business policy and environment, and policies with the stated goal to make certain activities more expensive for Canadians in support of greening the economy. These upward pressures are not the result of a confidence-inspiring, predictable and healthy growing economy, so employers are appropriately cautious and reluctant to lock into structural operational cost increases.
Respectfully submitted,
Sam Kemble
Executive Operations Officer,
With People Inc.
(780) 886-1679

Canada Labour Market and Employment Update, March 11, 2022

Canada Labour Market

The Canadian labour market increased jobs to pre-pandemic levels in February. Employers did this by adding 337,000 jobs across the country. Factors contributing to the economic surge in jobs recovery included Health authorities relaxed Omicron restrictions based on case count and hospitalization trends. This relaxation enabled employers to open more services and increase operating levels, permitting them to hire and rehire workers on layoffs. 
Public places and spaces open up. Services sectors surged, accounting for much of the gains. This trend is clearly reflected in a 12.6% month-over-month employment increase in the following sectors: 

The private Sector Leads the way in the Canadian Labour Market

Private sector-led growth accounted for 347,000 jobs added in the Canadian labour market. These gains were not evenly distributed, with a high proportion of growth experienced in Ontario and Quebec and prairie provinces lagging in recovery with higher unemployment rates.
Meanwhile, public sector employment levels remain flat. This trend makes sense as public sector employment remained steady during the pandemic and did not experience the layoffs many in the private sector experienced.

Self-Employment Cools

After an initial surge of increased self-employment, many Canadians realize the self-employment life is not for them or as fruitful as imagined. They revert to seeking more traditional employment opportunities.

Canada Labour Market Equity  Improves but Gaps Remain.

Canada’s labour market achieved record-high employment participation rates for core working-age women, and Indigenous and BIPOC populations, but equity gaps remain.
However, older workers are not experiencing the jobs gain recovery and risk being left behind as the employment market transitions, changing skill requirements, and ageism takes a toll on opportunities for this demographic.

No Great Resignation in Canada

Unlike in the United States, mass resignations are not expected in Canada’s labour market, as employees and employers return to work in on-premise, remote or hybrid formats. Employers take a thoughtful approach, offering options and time to adjust to proposed changes.

The Implications

These factors impact the Canada Labour Market in many ways, including adding uncertainty among employees, confusion among recruiters, frustration among hiring managers, and increased risk for employers.

Employees notice their purchasing power shrink and consume news with mixed or nuanced messages about inflation. Messages surrounding the causes of inflation are politically torqued with a spin—objective and unbiased information on the topic is challenging to find. Anxiety is created not only by actual and perceived loss but also by a fear of missing out as news of a tight-labour market comes from loud and vocal stakeholders. Employees agonize over whether they have pressed hard enough to get more favourable terms with their employer and in the labour market. Speculation over the expected length and extent of current inflation levels creates more uncertainty about what people should pursue and how they should position themselves to navigate these conditions.

Recruiters receive cold responses and combative candidates with aggressive positions regarding salary expectations. There is movement in the market, and a mismatch of skills, uncertainty, and physical isolation create communication challenges during the exchanges. As recruiters fall short of meeting fill rates, they seek to increase terms and conditions. Increased rates do not create more candidates when looking in the wrong places. Increased rates do create structural cost increases for businesses.

Hiring managers are frustrated by difficulty managing budgets and risk and delays in recruiting, and employees with demands at times with overtures to leave.

Employers face increased input costs, downward price pressure, uncertain financials, and rough market conditions. The Canada Labour Market, if approached without foresight and sophistication by employers, recruiters and hiring managers, has the potential to exacerbate inflationary pressures as what occurred in the United States.

Visit our News and Knowledge Centre Blog for more articles of interest.
(c) Workforce Delivery Inc. 2020

Alberta Labour Market and Employment Update, February 7, 2022

Alberta Employment and Labour Market Update

For the week of February 7, 2022


Employment Update: Canada lost 200,000 jobs in January. It is worth noting that Ontario and Quebec felt most of these losses after confronting the Omicron wave.

Meanwhile, Alberta employment increased by 7,000 jobs. However, full-time jobs receded by 3,900, and part-time employment increased by 10,900 positions.

The goods and manufacturing sector drove gains, with 18,400 positions filled. Service sector jobs (including education, professional and science services) declined by 11,300 positions month over month. Reductions experienced by the service sector would have been more significant were it not for gains in food, cultural, healthcare and accommodations roles.

These shifts have significant implications for Alberta employment. The trend displaces workers within specific skillsets and targets specific industries where much of the displacement occurs. Meanwhile, lower-paying jobs grow in service industries with fewer hours of work offered.

Alberta’s unemployment rate dropped slightly to 7.2%, and labour market participation reduced to 69.6%.

Construction permit values increased by 14% in 2021 – inflated input costs drove 60% of that increase.

Alberta inflation year over year increased to 4.8%, matching the national CPI rate.

On the bargaining front, 2022 negotiated wage settlements in the private sector average 1.26%. 2023 average negotiated private sectors wage settlements are 1.12%. Public sector settlements average 0.8% in 2022, and Public sector settlements average in 2023. The recent nurses’ wage settlement of 4.25% over four years, ratified by 87% of their membership, reaffirms this pattern.

Province-wide average wage rates in Alberta employment contracted 1.2% month over month and are down 2% year over year.

All the above factors must be considered when considering compensation and collective agreement negotiations strategies.

Visit our homepage for more information on our labour relations and human resources firm, with offices in Edmonton, Alberta, and Prince Geroge and Victoria, British Columbia.

Respectfully submitted by Workforce Delivery Inc.

(c) Workforce Delivery Inc. 2022