Gains from wage settlements hit six-year low in 2010

Last year was a tough one at the bargaining table.

Choppy economic growth, an uncertain outlook and slack in the labour market -- with roughly 1.5 million Canadians unemployed -- put a dent on wage settlements.

Labour settlements yielded an average 1.8-per-cent increase for 2010 – the lowest in six years, according to Human Resources and Skills Development Canada. That's a slide from 2009, in the thick of a recession, when settlements still averaged 2.5 per cent.

Wage increases got progressively lower as the year went on. They began last year at 2.1 per cent, on average, before ending 2010 with an average of 1.4 per cent.

Cutbacks in the public sector help explain the slowdown. "Public-sector wage restraint measures in several jurisdictions are key factors in explaining the relatively moderate figures for 2010," the report, released late Friday, said.

In Quebec, 45 agreements covering 360,000 public-sector employees resulted in wage adjustments averaging 1.2 per cent. In British Columbia, about 100,000 public-sector workers saw a wage freeze. And federally, the Government of Canada's contracts with 125,000 employees produced a wage hike of 1.7 per cent.

The muted gains weren't uniform. In Alberta, teachers, office employees and school maintenance staff saw hikes averaging 6 per cent. In Newfoundland and Labrador, two agreements provided public-sector staff with increases averaging 5 per cent.

Wage increases in the public sector averaged 1.6 per cent compared with 2.1 per cent in the private sector -- a reversal of previous years. On the private-sector side, wages went up the most in Saskatchewan and Alberta.

The minister's labour program reviewed 305 major agreements covering about 1.25 million employees. It also found the average duration of contracts was shorter last year - down to 41.5 months from 47.2 months in the prior year.

Last year's wage increases matched the annual rate of inflation for the first time since 2004; before that, wage increases had outstripped the pace of the consumer price index.