Canada’s adversarial labour relations system is increasingly undermining the national economy, driving up inflation, disrupting essential public services, and imposing massive costs on businesses and consumers, warns a new report from the Frontier Centre for Public Policy.
The study, The Pressing Case for Prioritizing the Public Interest in Canadian Labour Relations, authored by senior research associate Joseph Quesnel, paints a stark picture of the country’s deteriorating labour environment. It highlights a growing number of disruptive labour disputes in key sectors such as rail transportation, public services and ports, arguing that Canada’s outdated collective bargaining model is fueling instability.
“Frequent and prolonged labour disputes in critical industries are crippling the economy,” Quesnel said. “These disruptions paralyze supply chains, raise the cost of living, and weaken Canada’s global competitiveness.”
The economic toll is staggering. The report cites a recent federal rail strike that threatened to bring Canada’s two largest rail companies — Canadian National Railway and Canadian Pacific Railway — to a standstill. Together, they move approximately $1 billion worth of goods daily. According to the Railway Association of Canada, such disruptions cost the economy an estimated $341 million per day — roughly four per cent of the country’s gross domestic product.
“Consumers face shortages, businesses lose revenue, and workers risk job losses,” Quesnel said. “It’s clear that prolonged strikes and lockouts in essential services are no longer acceptable.”
The report lays out alarming trends. Since 2021, Canada has recorded over 1,100 strikes and lockouts involving more than 1.4 million workers. In 2023 alone, there were 745 significant labour disruptions, with no signs of slowing down.
Among the most damaging were last summer’s strike by 7,400 British Columbia port workers, which crippled supply chains nationwide, and the 2023 federal public-service strike, which saw more than 120,000 workers walk off the job—the largest public-sector strike in Canadian history.
The report argues that Canada’s labour relations model, which encourages aggressive bargaining and power struggles, is at the heart of the problem. “Labour negotiations have become battles of attrition, with unions and employers entrenched in confrontation rather than cooperation,” Quesnel said.
Political interference has exacerbated the crisis, according to Quesnel. He points to federal NDP Leader Jagmeet Singh’s stance during a recent railway strike, when he suggested he would risk triggering a federal election rather than support legislation imposing arbitration—despite dire economic warnings.
“It’s deeply concerning when political leaders prioritize ideology over national economic stability,” he said. “The public interest must come first, and governments must act decisively to protect Canadians from these destructive disruptions.”
The Frontier Centre’s report calls for sweeping labour policy reforms to restore balance and protect the economy. Key recommendations include repealing the federal ban on replacement workers in federally regulated industries, arguing that the ban extends disputes by removing employers’ ability to mitigate disruptions. It also proposes expanding the definition of essential services to include critical economic sectors like railways and ports, allowing governments to intervene more rapidly.
Other recommendations include adopting a collaborative bargaining approach inspired by European models, such as those in Germany and Sweden, where union-employer cooperation reduces the likelihood of strikes. The report suggests invoking the notwithstanding clause, Section 33, to override judicial activism that has increasingly entrenched the right to strike at the expense of public and economic stability. It also calls for reducing public-sector monopolies in essential services like health care and education, arguing that monopolistic unions wield excessive power over taxpayers and governments.
“Countries that emphasize cooperation instead of confrontation see fewer disruptions,” Quesnel said. “Canada should learn from these successful models and implement meaningful reform.”
The report warns that without immediate intervention, Canada will continue to see more damaging strikes, supply chain failures, and inflationary pressure that punishes everyday Canadians.
“Our current system empowers unions to hold the economy hostage,” Quesnel said. “Governments must act to ensure that critical services continue and that workers and employers alike are held accountable to the broader public interest.“
With the economy at stake, Quesnel said, the message is clear: the status quo is unsustainable. “Canada must rethink its approach to labour relations before the next crisis strikes.“
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