Business Groups Sound Alarm Over Potential Air Canada Shutdown, Citing ‘Significant Economic Damage’

Air Canada logos are seen on the tails of planes at the airport in Montreal on June 26, 2023. The Canadian Press/Adrian Wyld

Canada’s business community is sounding the alarm as Air Canada prepares to ground nearly all flights by Aug. 16 if no deal is reached with unionized flight attendants.

The labour dispute has been ongoing since the start of this year over pay and work conditions, with around 10,000 Air Canada flight attendants who belong to the Canadian Union of Public Employees (CUPE) rejecting the airline’s most recent offer on Aug. 11.

Unionized flight attendants issued a 72-hour strike notice followed by a lockout from the airline on Aug. 13.

With around 300 flights already grounded and the airline saying all Air Canada and Air Canada Rouge flights will be cancelled by Saturday if no deal is reached, the Canadian Federation of Independent Business (CFIB) and Toronto Region Board of Trade (TRBT) say that the economic fallout from even a brief shutdown would be enormous.

“As we get closer to a potential Saturday morning strike by Air Canada flight attendants, Toronto Region Board of Trade urges both parties to continue negotiations to avoid further disruption for Canadian air travellers and businesses,” wrote TRBT President and CEO Giles Gherson in an Aug. 15 statement. “While some disruption is already taking place, a complete shut down of Canada’s largest airline—even briefly—would have broad-reaching economic consequences.”

Gherson’s concerns were echoed by CFIB, whose executive vice-president Corinne Pohlmann issued a statement Aug. 13 calling on both sides to come to an agreement before the strike deadline.

“Small businesses are deeply concerned with the prospect of an Air Canada strike given the massive economic uncertainty currently facing the country. One-third of Canadian small firms depend on the summer tourism season for their revenues, and we cannot afford to lose a single day,” Pohlmann wrote.

“Given the ongoing tariff disputes with the United States and China, Canadian businesses are scrambling to find new suppliers and customers in other provinces or other countries. Removing Canada’s major domestic and international carrier from service would be another blow at this critical time,” she added, warning that a strike would cause “significant economic damage” to Canada’s economy.

TRBT said that Air Canada serves more than 130,000 passengers per day, including many business travellers, and is critical for Canada’s domestic and international trade. The board noted that the labour dispute is happening at the exact moment that Canada is seeking to revitalize its economy and respond to mounting trade pressures, harming the country’s “global reputation as a reliable trading partner” and driving trading partners to seek alternative markets for import and export.

As the strike deadline looms, Canada’s Minister of Jobs and Families Patty Hajdu relayed a request to the union from Air Canada asking that the matter be brought under binding arbitration where a mediator hears both sides and delivers a final decision to end the dispute. CUPE’s Air Canada chapter rejected the offer Aug. 15, saying Air Canada is trying to “interfere” in free and fair negotiations.

Both CFIB and TRBT have called on Ottawa to intervene in the dispute with binding arbitration. Canada’s federal government has the ability to force binding arbitration on negotiating parties, as it did last year in blocking a planned Teamsters Canada rail workers strike by about 10,000 union members and ordering them back to work. The union complied with the order but also appealed, with legal processes related to the appeal currently ongoing.