North America’s largest construction union is on strike
LiUNA Local 183 is the largest construction company in North America and is located in Toronto. It represents 15,000 employees in approximately 30 occupations, including multi-storey formations and frameworks. Not all construction sites have these unionized workers, but it is a good bet that the big ones make.
Toronto construction started unbelievably last night
The local 183 went on a legal strike last night, while the negotiations collapsed. This will stop most major projects in Greater Toronto, but not all. Subsequent projects entering the final stages may be able to accomplish them with less delay. Early stage projects will not be so lucky, especially in the multi-storey sector. Since trading involves a lot of trading, there is no trading for universal growth. Statistics from Stat Statistics Canada show that Toronto trade union wages are lagging behind. The latest available data are November 2021 and show that the average salary increases by 2.21% compared to a year ago. Even then, headline inflation was 4.7% – more than double that of growth. With the CPI reaching 6.7% in March, the 31-year-old will find it difficult for employers to absorb anything close to it.
The construction strike in Toronto will not last long
Fears of a prolonged strike in housing construction are certainly exaggerated. Builders are under considerable pressure to complete the building with inflation and rising interest rates. They are not in the habit of risking project failure for a few extra dollars. At the same time, the union is also under pressure over its Ontario border on builders’ strikes. The labor law effectively limits the strike to about six weeks. After this point, the employees can return to their work and the arbitration can be ordered. The county estimates that the average strike lasts about four weeks, so six is a decent buffer. Earlier this year, the RBC CEO urged the Bank of Canada (BoC) to aggressively raise interest rates. He warned that once inflation starts flowing into wages, there is no going back as we do not make wages back. The BoC did not take the warning as a matter of urgency, delaying action for a few more months – or even making it serious until April. Now the central bank is admittedly behind the curve, while the effects of inflation are flowing into wages.
