Experts say labour market 'plagued by two interrelated and longstanding crises'
Expanding sectoral bargaining could reshape how work is organised across Canada’s low-wage industries and solve Canada’s labour market challenges, two experts from the Canadian Centre for Policy Alternatives (CCPA) claim.
Currently, declining union coverage and the growth of precarious employment are undermining job quality and contributing to persistent low wages, particularly in the private sector. The CCPA report authors—Adam King, Assistant Professor in the Labour Studies Program at the University of Manitoba, and Niall Harney, Errol Black Chair in Labour Issues at the CCPA—say the current system is no longer fit for purpose.
“The Canadian labour market is plagued by two interrelated and longstanding crises: declining union density and the growth of precarious, low-wage work,” they say.
Union density has fallen steadily since the early 1980s, with only about 30% of Canadian workers now covered by a collective agreement. The decline has been concentrated in the private sector, where coverage has dropped to just over 15% nationally.
The report notes that this shift coincides with the expansion of nonstandard work arrangements, including temporary, part-time and gig employment, as well as subcontracting and franchising models. These trends have led to greater job insecurity and income instability for many workers.
Canada’s economy avoided recession in 2025 and continues to generate jobs at a faster per‑capita pace than the United States, according to the federal government’s Spring Economic Update 2026.
However, the way the Canadian labour market is moving could be detrimental to the country’s competitiveness, according to the Bank of Canada. Currently, employers are operating in a "low hire–low fire" labour market, with hiring sharply slower, long-term unemployment near historic highs and youth joblessness rising faster than any other age group, External Deputy Governor Nicolas Vincent said.
Manitoba highlights widening sector gaps
Manitoba reflects broader national trends, while also illustrating the depth of sectoral disparities, according to CCPA. Overall union coverage in the province declined from 37.8% in 1997 to 34.1% in 2025, remaining above the national average.
However, the divide between public and private sectors remains stark. In 2025, more than 79% of public sector workers in Manitoba were unionised, compared to just 16.1% in the private sector.
At the industry level, low union density is concentrated in private service sectors. Accommodation and food services had union coverage of only 3.1% in 2025, while wholesale and retail trade remained below 15%.
“For these workers clustered in low-wage private service industries… the lack of union coverage has always been a crisis,” King and Harney write.
The report indicates that these sectors have historically been excluded from collective bargaining frameworks, contributing to persistent issues around job quality and stability.
Low wages and compliance concerns persist
The findings link low union coverage directly to wage outcomes and employment standards. While the share of low-paid workers in Canada has declined—from 24.2% in 2006 to 18.5% in 2024—it remains high compared to countries with sectoral bargaining systems.
In Manitoba, about one in four workers earns less than a living wage, estimated at $19.77 per hour in 2024.
“Workers earning low pay are concentrated in industries with low union density and hence lack the capacity to collectively bargain up their wages,” the authors state.
The report also raises concerns about enforcement gaps. Workers without union representation are more reliant on government oversight, which it describes as under-resourced.
“Workers must rely on the enforcement capacity of under-resourced and overstretched government labour inspectorates,” the report notes.
Shift toward sectoral bargaining proposed
To address these challenges, the CCPA report authors call for a transition to sectoral bargaining, where wages and working conditions are negotiated across industries rather than at individual worksites.
“Canada’s model of worksite-level bargaining was never designed to facilitate and support collective bargaining in these industries,” King and Harney write.
They argue that sectoral bargaining could improve wage equality, stabilise union coverage and encourage employers to compete on productivity and service quality rather than labour costs.
“There is strong evidence that sectoral bargaining models improve income equality by raising the pay of workers at the low end of the wage distribution,” they state.
The report points to Manitoba as a potential leader, citing recent legislative changes such as the reintroduction of card-check certification and a ban on replacement workers.
“The time is nigh to consider sectoral bargaining as an alternative, particularly in Manitoba,” the authors conclude.
According to data from Statistics Canada, about 5.3 million people (30.4% of employees) were covered by a collective bargaining agreement in 2023. This coverage figure includes union members plus non-members covered by a collective agreement or union contract.
The unionization rate has fallen over time: from a record 37.6% in 1981 to 30.4% in 2023, according to data from StatCan. The decline is concentrated in the private sector — private-sector coverage fell from 21.3% in 1997 to 15.5% in 2023, while public-sector coverage rose to 76.7%, making public-sector workers roughly five times as likely to be covered.
