About the Ministry

News Releases

Employment Standards

Health and Safety

Labour Relations

Location: Ministry of Labour > Labour Relations > Publications >

Ontario Collective Bargaining Agreement Expirations, 2008

3. Economic Setting

Although Ontario’s economy is expected to grow moderately in 2008, it will continue to be challenged by a strong Canadian dollar, high oil prices, softer U.S. demand and increased competition from newly industrializing countries. Ontario’s economy remains resilient despite these developments and will strengthen in 2009 as it adjusts to the challenging global environment. According to private-sector forecasters¹, Ontario’s real Gross Domestic Product (GDP) is projected to grow by 2% in 2007, 1.8% in 2008, and 2.6% in 2009 (Figure 2).

The annual inflation rate, as measured by Ontario’s Consumer Price Index (CPI)², is estimated to average 1.8% in 2007, the same as last year. Ontario inflation is expected to drop to 1.4% in 2008. This incorporates the one percentage point cut in the federal goods and services tax (GST) on January 1, 2008 that will reduce the CPI inflation rate by an estimated 0.6 per cent. Ontario’s CPI inflation rate is expected to be 2% in 2009 (Figure 2).

The estimated national unemployment rate¹ for 2007 is 6%, down from 6.3% in 2006. Ontario’s unemployment rate is projected to rise slightly from 6.3% in 2006 to 6.4% in 2007 and employment is expected to grow by 1.6% in 2007, compared to 1.5% in 2006²

During the first ten months of 2007, the annual increase in base wage rates for collective agreements covering 200 or more employees averaged 3%, an increase from the average annual rate of 2.5% in 2006. Wage increases for both public and private sectors showed increases from last year. Private sector wage settlements averaged 2.9% for the first ten months of 2007, compared to 1.8% in 2006. In the public sector, wage settlements increased from 2.9% in 2006 to 3.1% from January to October 2007.

The Conference Board of Canada³ reports that the key bargaining issues will be wages, health benefits and pensions for both management and unions in 2008. As for projected wage increases, an average of 3% is expected in the private sector and 3.4% in the public sector.