A strike by more than 150,000 federal civil servants could cost the Canadian economy as much as $200 million a day in lost output, according to an analysis by Scotiabank (BNS).
The strike, which began on April 19 and is one of the largest job actions in Canadian history, could shave 1% off Canada’s gross domestic product (GDP) on an annualized basis if it lasts for a month, says Scotiabank in an economic analysis.
A majority of economists polled by Bloomberg News expect Canada’s economy to enter a recession in the second and third quarters of this year. A prolonged federal strike could make things worse for the economy.
More than 150,000 federal workers walked off the job over a labour dispute with Prime Minister Justin Trudeau’s government.
Federal workers are asking for a 13.5% pay increase over three years, while the government has offered 9%. The sides have been engaged in contract negotiations since June 2021.
The strike is disrupting government services nationwide, from passport renewals to the operations of the Coast Guard.
The strike also includes 35,000 workers at the Canada Revenue Agency (CRA), which is less than two weeks away from a May 1 income tax filing deadline.
The current job action is the first widespread strike by the Public Service Alliance of Canada (PSAC), the union that represents federal workers, in nearly 20 years.
