CLV Reports surveys 2009 second-quarter settlements

‘Wait and see’ prevalent as average length of contracts drops

Canada Labour Views (CLV) Reports has analyzed 71 wage settlements that occurred in Canada in April, May and June of 2009. Fifty-three are in the private sector. Seven of the agreements are from British Columbia, six are from Alberta, five from New Brunswick, two each from Quebec and Manitoba, one each from Nova Scotia and Saskatchewan, and six cover more than one province. Forty-one are from Ontario. They cover 118,800 employees. The average term of the agreements is 2.86 years. This average comprises six one-year agreements, two at less than two years, 12 two-year, one between two and three years, 34 three-year, three between three and four, nine four-year, one between four and five and three five-year. This average is significantly lower than recent quarters with a big jump in short agreements.

The 18 public-sector agreements have average wage increases of 2.9 per cent in the first year, 2.7 per cent over 16 agreements in the second year and 2.45 per cent over 12 in the third. One agreement has a fourth year with a 1.5 per cent wage increase. At 2.8 years on average, the length of these public-sector contracts is down from 3.65 years last quarter.

Two private-sector settlements include cost-of-living formulas that may provide employees with additional wages, based on increases in the Consumer Price Index (CPI). One agreement has an open Cost of Living Allowance (COLA) clause without any restriction if the CPI increases. There is a wage freeze in the first year. In the second year, the wage increase is 53¢ or 1.75 per cent and, in the third, 62¢ or 2.0 per cent. One has a limited COLA that produces increases that are subject to triggers, caps or time limits. This agreement has a wage increase of 24¢ or 1.0 per cent in the first year and 25¢ or 1.0 per cent in the second year.

The 51 private-sector settlements with no COLA formula provide first-year wage increases averaging 29.4¢ or 1.4 per cent. With 16 wage freezes and one wage reduction excluded, this average becomes 47.9¢ or 2.3 per cent. The second-year average of 45 agreements is 37.8¢ or 1.9 per cent. With seven freezes excluded, it becomes 44.8¢ or 2.2 per cent. The third-year average of 14 agreements is 39.6¢ or 2.0 per cent. With five freezes excluded, the average becomes 46.25¢ or 2.4 per cent. The average of seven fourth-year increases is 37.9¢ or 2.2 per cent, and, with one freeze excluded, 40.8¢ or 2.35 per cent. The three remaining fifth-year increases are 45.3¢ or 2.2 per cent.

First-quarter non-COLA increases (with wage freezes included), noted at 1.4 per cent, 1.9 per cent and 2.0 per cent, are a sharply lower than the 2.7 per cent, 2.7 per cent and 2.6 per cent seen in the first quarter of 2009. The growing number of wage freezes is the culprit. The corresponding averages in the fourth and third quarters of 2008 are 3.2 per cent, 2.6 per cent and 2.7 per cent, and 3.0 per cent, 2.8 per cent and 2.8 per cent, respectively, for the first, second and third years.

As far as other statistical studies are concerned, the Ontario Ministry of Labour’s statistics show an average annual increase of 1.2 per cent in the private sector (down from 2.0 per cent in the first quarter) and 2.6 per cent in the public (up from 2.4 per cent) for the second quarter of 2009 based on bargaining units over 200 with and without COLAs. Alberta reports 0.8 per cent in the private sector (down from 1.9 per cent) and 4.0 per cent in the public sector (up from 2.8 per cent). Human Resources and Skills Development Canada (HRSDC) reports 1.8 per cent in the private sector (down from 2.9 per cent in the first quarter) and 2.8 per cent in the public sector (up from 2.4 per cent). These averages include estimated COLA; CLV’s do not.

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