Costly Labour Disputes Paralyzing Canada’s Economy: Report

Press Release

March 13, 2025

Frontier Centre for Public Policy study calls for urgent reforms to end disruptive strikes, protect public interest

WINNIPEG – Canada’s adversarial approach to labour relations is causing frequent strikes and lockouts that seriously damage the economy and disrupt critical services, according to a new report released today by the Frontier Centre for Public Policy.

In the report, The Pressing Case for Prioritizing the Public Interest in Canadian Labour Relations, Joseph Quesnel, a senior research associate with the Frontier Centre, argues the current labour relations system places excessive power in the hands of unions and employers, often leaving the public interest neglected.

He highlights recent rail and public-service strikes, which have significantly disrupted the Canadian economy and negatively impacted everyday Canadians.

“Frequent labour disruptions in crucial sectors like rail transportation cost Canadians hundreds of millions of dollars daily, causing severe economic hardship”; said Quesnel. “Our current system prioritizes adversarial bargaining rather than collaborative solutions, and it’s Canadians who ultimately suffer.”

The report estimates a recent potential rail strike alone could have cost the economy $341 million per day—equivalent to about four per cent of Canada’s gross domestic product.

To protect Canadians and ensure economic stability, the report recommends several reforms, including:

• Repealing the federal ban on replacement workers to discourage prolonged labour disputes if federally regulated workplaces.
• Expanding the definition of essential services to include railways and other economically critical sectors, limiting the negative impacts of strikes and lockouts.
• Encouraging collaborative labour-management negotiations, similar to successful European models, to reduce confrontational bargaining tactics.
• Curbing judicial activism by using Section 33 of the Charter—the notwithstanding clause—to ensure the government can prioritize public welfare over special interests.
• Reducing public-sector monopolies in health care and education to lessen vulnerability to disruptions caused by strikes.

“Reorienting Canada’s labour relations system toward consensus and cooperation will help prevent economic damage and better serve the public interest” ; said Quesnel.

Dowload the full report. (24 pages)

About the Frontier Centre:

The Frontier Centre for Public Policy is an independent Canadian think-tank dedicated to developing practical solutions to improve economic performance and government accountability.

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