Mediation next for Air Canada dispute, but uncertainty lingers for SMBs

Air Canada’s rejected wage deal means flights keep running, but uncertainty remains for SMBs

Air Canada’s wage dispute with its flight attendants took another turn this week, with more than 99 per cent of union members rejecting the latest offer. As reported by CTV News on September 6, the rejection means the issue now heads to mediation and potentially arbitration. While the risk of a strike has been paused, uncertainty remains for SMBs that depend on the airline.

This article follows our earlier coverage of the August strike, which explored how SMBs were affected when flights were grounded.

Labour peace for now, but questions remain

Flights are continuing as scheduled. That’s due to a prior agreement between Air Canada and CUPE, the Canadian Union of Public Employees, which prevents a strike or lockout during the mediation and arbitration process. Air Canada said it remains “fully committed to the mediation and arbitration process,” according to CTV News.

Most terms of the tentative deal are expected to be retained, apart from the unresolved wage issue. The rejected agreement, reported by CTV News, had included a 12 per cent salary increase this year for most junior flight attendants and an eight per cent bump for more senior members. Voting closed Saturday, with 99.4 per cent of the union’s 10,000-plus members participating.

The original deal had ended a three-day strike in August through federal mediation. While that restored operations at the time, the overwhelming rejection of the new wage terms signals that deeper issues remain unresolved. CUPE expressed concern over government involvement, stating, “It is impossible to ignore the corrosive role the federal government played in these negotiations.” The union claimed this had given Air Canada “the leverage they needed to suppress flight attendants’ wages,” as reported by CTV News.

Although the formal process is designed to avoid further disruption, the mediation phase can take weeks. In that time, schedules, service quality or operational capacity could still shift, particularly if workforce sentiment deteriorates. Even if a strike is no longer an immediate risk, SMBs could still face knock-on effects, especially if service levels or pricing are adjusted in response to higher labour costs.

What small businesses should watch for

Unlike larger companies with dedicated risk teams, SMBs typically have fewer buffers against travel-related interruptions. Even moderate delays or cancellations can impact customer meetings, events and supplier coordination — particularly in sectors like tourism, consulting or distribution, where travel plays a key role.

Uncertainty over wage outcomes also introduces potential knock-on effects. If the dispute concludes with significantly higher labour costs, carriers could reassess pricing, flight frequency or route economics. That could have flow-on effects for SMB travel budgets and planning. For example, higher fares could make regional travel less accessible, or reduced scheduling might limit flexibility for last-minute business trips.

Supply chains could also feel the pressure. Air transport isn’t only about moving passengers; many SMBs rely on carriers like Air Canada for time-sensitive shipments of parts, products or equipment. Even minor delays in freight movement can cascade into missed deadlines or lost contracts. For businesses with cross-border operations, this uncertainty comes on top of wider global supply chain pressures.

For now, maintaining flexibility is key. Businesses with upcoming flights should monitor developments and consider backup options, such as refundable tickets or alternative carriers. Reviewing internal travel policies can help clarify escalation steps if disruptions occur. Open communication with staff is equally important, so employees know who to contact if plans suddenly change. Proactively updating customers or suppliers about potential risks can also help preserve trust during uncertain times.

The current phase is intended to stabilize the situation, but the margin for disruption remains thin. For SMBs, the lesson is clear: disruption doesn’t need to mean disaster if planning is done in advance. The more businesses prepare today, the more resilient they’ll be if outcomes shift in the months ahead.