Hajdu orders binding arbitration, resumption of operations to end Air Canada strike

OTTAWA — The federal Liberal government is intervening to resolve the labour dispute at Canada’s largest airline on the first day of a strike by its flight attendants that has scuttled hundreds of flights and threatened the economy.

Jobs Minister Patty Hajdu said she directed the Canada Industrial Relations Board to order Air Canada and the union representing its flgiht attendants to resume operations and resolve the dispute through binding arbitration.

Hajdu said she made the call after meeting with both sides Friday night, finding that talks were breaking down and the two sides remained too far apart.

“In this instance, and despite resolution on a number of key items, this dispute will not be resolved quickly enough,” she said at a news conference in Ottawa. “Canadians have already sacrificed a lot in this uncertain economy and this labour disruption is adding to their worries and financial burdens.”

The move comes amid intense pressure from business groups to resolve the labour disruption that threatened an economy already reeling from the economic toll of U.S. President Donald Trump’s trade war.

“With both parties declaring an impasse in negotiations, with valuable cargo grounded and passengers stranded, the government made the right decision to refer the two sides to binding arbitration,” said Matthew Holmes, head of public policy for the Canadian Chamber of Commerce.

“Every hour counts given Air Canada says it will need up to a week for its network to be fully operationalized again, meaning that close to a million Canadians and international visitors could be impacted.”

Passengers around the world are feeling the effects after the union representing more than 10,000 flight attendants with Air Canada announced its members were walking off the job after it was unable to reach an eleventh-hour deal with the airline.

Air Canada and CUPE have been in talks for some eight months but have yet to reach a deal. Hajdu said the employer made an offer last night that the union rejected.

The strike officially began just before 1 a.m. ET on Saturday and in turn, Air Canada locked out its agents about 30 minutes later due to the strike action.

Hajdu said that was already causing “significant harm” and having negative impacts on Canadians and the national economy.

“Now is not the time to take risks with our economy. A work stoppage would cause thousands of Canadians to be stranded abroad and across this country and this is simple unacceptable,” Hajdu said. “This is not a decision I have taken lightly, but the potential for immediate negative impact on Canadians and our economy is simply too great.”

She pointed to labour disruptions last year that had a “massive” impact on the entire economy. Those included a major rail strike involving CN Rail and CPKC and port strikes in Montreal and Vancouver that disrupted supply chains.

Air Canada cancelled more than 600 flights over the past two days in preparation for a potential work stoppage, and Hajdu said it could be days before service returns to normal.

The union representing the flight attendants was critical of Hajdu’s decision to intervene.

“The Liberals have talked out of both sides of their mouths. They said the best place for this is at the bargaining table. They refused to correct this historic injustice through legislation,” said Wesley Lesosky, head of the Air Canada Component of CUPE.

“Now, when we’re at the bargaining table with an obstinate employer, the Liberals are violating our Charter rights to take job action and give Air Canada exactly what they want: hours and hours of unpaid labour from underpaid flight attendants, while the company pulls in sky-high profits and extraordinary executive compensation.”

The minister has ordered the labour board to extend the term of the existing collective agreement until the arbitrator produces a new one.

This report by The Canadian Press was first published Aug. 16, 2025.