Air Canada strike a reminder of risks for SMBs

The Air Canada strike that took place in August is over, with a new tentative agreement now reached. But the disruption served as a stark reminder of how vulnerable small and medium-sized businesses (SMBs) are when Canada’s largest airline is grounded.

The airline’s flight attendants, represented by the Canadian Union of Public Employees (CUPE), went on strike after federally mediated talks failed to produce a deal. The work stoppage ended on August 19 when a tentative four-year agreement was reached, allowing flights to gradually resume. At the time of writing, the deal is being voted on by union members, with the outcome expected in early September.

Throughout, the Canadian Federation of Independent Business (CFIB) expressed concern about the impact on the SMB sector, particularly in light of an already fragile economic environment. “Small businesses are deeply concerned with the prospect of an Air Canada strike,” Corinne Pohlmann, Executive Vice-President, Advocacy, CFIB, said in a public statement at the time.

Operations at risk for SMBs

While much of the public discussion centred on travel delays and stranded passengers, the knock-on effects for Canada’s small and medium-sized businesses proved far more severe — and potentially longer lasting.

SMBs frequently depend on air travel to deliver key business functions. This includes domestic and international shipping of high-value goods, on-site client meetings, equipment transport, and remote staffing support. Even a short disruption at the country’s largest airline delayed projects, interrupted contractual obligations, and stalled the delivery of essential parts and products.

Unlike large corporations, many SMBs don’t have in-house travel departments, secondary logistics providers, or dedicated contingency budgets. That makes them especially vulnerable to last-minute cancellations or service gaps.

Customer-facing industries — including tourism, events, and consulting — were particularly exposed during the strike. When employees were unable to reach clients or scheduled events were disrupted, it resulted in reputational damage, lost income, or even breached agreements.

And while digital workarounds like video calls may help soften the blow, they aren’t a full substitute in industries where physical presence, equipment transport, or regional inspections are required. “This isn’t just about delays — for a lot of small businesses, it’s about deliverability, reputation and cash flow,” said Kevin Kliman, President of Canadian Business at Employment Hero. “Strikes can expose operational weak spots that were never stress-tested.”

With travel schedules tightening during peak season, even short delays can snowball — especially when SMBs don’t have documented backup plans or digitized systems to pivot quickly.

Federal intervention remains contentious

During the August strike, the potential for federal involvement quickly emerged as a flashpoint. CFIB urged Ottawa to step in to avoid disruptions, stating: “We are calling on the airline and union to resolve this issue with no disruption to service. If this is unsuccessful, Ottawa needs to immediately intervene to avoid the significant economic damage a strike would have on Canada’s economy,” said Pohlmann.

However, labour experts warned that such intervention could come at a cost. “When the government swoops in only at the behest of employers, it undermines our entire system of labour relations,” said Professor Larry Savage, labour studies academic at Brock University, in an interview with CTV News.

Federal intervention in labour disputes — especially in federally regulated sectors like air transport — can involve back-to-work legislation or binding arbitration. While that might resolve short-term business disruptions, critics argue it risks eroding the legitimacy of the collective bargaining process.

In this case, the strike ended at the bargaining table with a tentative deal, avoiding binding arbitration — though the contract still awaits ratification by CUPE members.

For SMBs concerned about the potential fallout, experts recommend reviewing business travel plans, identifying critical service dependencies, and communicating early with customers or suppliers likely to be affected.

Suggested steps include:

• Reviewing and updating internal policies for travel, remote work and client delays
• Documenting escalation processes and contingency responsibilities
• Using digital tools to streamline comms, payroll and staff scheduling
• Pre-book flexible or refundable travel options if business trips are essential

The August strike reinforced that even brief disruptions can ripple across the economy. For SMBs, resilience planning is no longer optional — it’s essential.

Union members are now voting on the tentative agreement, with results expected in early September. If the deal is ratified, it will secure labour peace for four years. If rejected, wage terms will move to arbitration, though further strike action is off the table.

For Canada’s SMBs, the message remains the same: disruption is always a possibility. Whether caused by strikes, weather, or other shocks, preparation today will determine how well businesses can withstand tomorrow’s challenges.