Work in North America’s busiest construction site has been halted this week. LiUNA Union Local 183 members of the housing construction voted for a strike last night. Locals make up a significant proportion of housing traders in Greater Toronto. As the livelihood negotiations failed, union members went on legal strike.
North America’s largest building union goes on strike
LiUNA Local 183 is the largest construction union in North America and is located in Toronto. It represents 15,000 workers in about 30 occupations, including high-rise construction and framing. Not every construction site has these union workers, but it is good that the big ones have.
Toronto construction deals went on strike last night
Local 183 went on legal strike last night while negotiations failed. This will stop most major projects in Greater Toronto, but not all. Late-stage projects entering the final stages may be able to pass with fewer delays. Projects at an early stage will not be so happy, especially in the high-rise building sector.
As the negotiation involves several transactions, there is no agreed universal increase. Statistics Canada (Stat Can) data shows that the salaries of construction unions in Toronto are lagging behind. The latest available data are November 2021 and show that the average salary has increased by 2.21% compared to a year earlier. Even then, core inflation was 4.7% – more than double the growth. With the CPI reaching 6.7% in March, a 31-year high, it will be difficult for employers to absorb anything close to that.
The construction strike in Toronto will not last very long
Fears of a prolonged housing strike are definitely exaggerated. Builders are under significant pressure to complete construction with inflation and rising interest rates. They are not in the habit of risking the project for a few extra bucks.
At the same time, the union is also under pressure due to Ontario’s restrictions on strikes by home builders. The Labor Relations Act effectively limits the strike to about six weeks. After that, workers may be authorized to return to work and arbitration may be ordered. The province estimates that the average strike lasts about four weeks, so six is a decent buffer.
Earlier this year, RBC’s chief executive called on the Bank of Canada (BoC) to start aggressively raising interest rates. He warned that once inflation starts to flow into wages, there is no going back because we are not going back. The BoC did not receive the urgency of the warning, postponing action for several more months – it did not even become serious until April. Now the central bank, of course, is behind the curve as inflation flows into wages.
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