File: 585-02-44668

IN THE MATTER OF

THE FEDERAL PUBLIC SECTOR LABOUR RELATIONS ACT

and a Request for Arbitration affecting

the Canadian Merchant Service Guild, as Bargaining Agent,

and the Treasury Board, as Employer,

in respect of the bargaining unit composed of the Ships’ Officers (SO) Group

Before: William Kaplan, Chairperson,

J.D. Sharp, Treasury Board nominee,

Joseph Herbert, Bargaining Agent nominee

For the Bargaining Agent: Samantha Lamb

For the Employer: Daniel Asselin

The matters in dispute proceeded by written submissions.

The Board met in Executive Session on November 7, 2025.

I. Introduction

[1] On December 21, 2023, the Board issued an award resolving the collective agreement for the Ships’ Officers (SO) group. As the general wage settlement pattern for 2025 had not yet been established, the Board remitted the issue of wages in the final year of the collective agreement to the parties but remained seized if they were unable to agree, which turned out to be the case. Accordingly, this issue came back before us. The SOs are seeking a 4% increase (2% general wages and 2% market adjustment); the employer is offering a 2% general wage increase. The parties agreed to proceed by written submissions and that process was completed on October 31, 2025. The Board met in Executive Session on November 7, 2025.

II. Union Submissions

[2] The union agreed: 2% was the appropriate general wage increase for 2025; however, it was also of the view that there was justification for a further 2% market adjustment. The fact of the matter, the union argued, was that the reasons that led to the Board earlier awarding a market adjustment continued to evolve in the nearly two years following issue of the Board’s award requiring an additional market adjustment. Recruitment and retention challenges had become even more significant. The Coast Guard continued to suffer from a lack of qualified personnel in key areas, while an impending wave of retirements would make this deteriorating situation even more challenging. It was well established, and non-controversial, that the lack of qualified personnel was affecting operations, and the union referred to the employer’s own projections and some other studies in support of this submission. Job postings – of which there were many – were not attracting candidates. Cost of living pressures, especially on the west coast, were notable, as were the difficulties in attracting qualified bilingual personnel, among several other factors identified and discussed in the SO submissions. The Canadian Marine College did not have the capacity to supply enough Officer Cadets to meet expected vacancies. A compensation increase was accordingly necessary to address this recruitment and retention situation, which was, the SOs noted, part of a world-wide shortage of mariners.

[3] Moreover, the union continued, the widening gap between Coast Guard salaries and those in the private sector – which had accelerated in the past two years – provided additional justification for the sought-after market increase. The fact was that the Guild was negotiating general wage increases for 2025 with private sector firms well above those being offered by the employer (as was illustrated in a lengthy table in the SOs brief). In this context, the Coast Guard could not compete. A further market adjustment was, accordingly, established by application of the appropriate statutory factors, and demonstrated need. It was both necessary and justified. The SOs therefore asked for a 2% wage increase and a 2% market adjustment, both effective April 1, 2025.

III. Treasury Board Submissions

[4] Treasury Board began its submissions with the observation that the parties were agreed on a 2% general wage increase. That was, after all, the now well-established pattern. The employer noted that as of October 2025, 2% wage increases for that year are now ubiquitous across the federal public service, both negotiated and awarded. Put another way, 99% of the collective agreements that include economic increases in 2025 are resolved and they reflected a consistent pattern of 2% general wage increases. The earlier arbitration award between these parties already awarded a 4% market adjustment. The Board, the employer pointed out, had already addressed the union’s request for a market adjustment and only provided for a reopener because there was, at the time of the earlier proceeding, no established general wage settlement pattern for 2025. In these circumstances, Treasury Board submitted, the Board must focus its attention on the general compensation increase only, and the parties were agreed about what the appropriate increase was. The employer asked the union’s request for a further market adjustment be denied and a 2% general wage increase only be awarded.

IV. Discussion and Decision

[5] In our December 21, 2023 award, we began with the observation that the SOs render incredibly valuable service to the people of Canada. They protect our sovereignty and serve Canadian communities coast to coast to coast. We further observed that it was vital that SOs be properly compensated as they perform these important functions. In that award, we extensively canvassed issues such as recruitment and retention, cost of living and compression. We were ultimately persuaded that the overall federal public sector wage pattern should be followed with a one-time market adjustment.

[6] There is no doubt but that 2%, as the parties agree, is the appropriate general wage increase for 2025. That is the universal pattern in the federal public service, both freely bargained and awarded. The only issue is the union’s request for a further market adjustment. In our earlier decision, we awarded a 4% market adjustment based in part on recruitment and retention and in part to maintain appropriate compression between SO and SC rates (after having also reviewed other pressures in the system identified by the SOs). The market adjustment was settled by our initial award, and it was settled for the entire term of the collective agreement. Having awarded a market adjustment for the term of the award, we remained seized with respect to the general wage increase for the fourth year because a general wage compensation pattern had not yet emerged. That issue is now resolved, and it was never intended by us that the reopener be for anything other than awarding the pattern increase once it emerged. Put another way, uncertainty about the 2025 outcome, based on the data at the time of our hearing and award, persuaded us to leave that matter open to ensure that neither the employer nor the union was prejudiced.

[7] Accordingly, we award a 2% general wage increase effective April 1, 2025.

[8] At the request of the parties, we remain seized with respect to the implementation of this award.

November 13, 2025.

William Kaplan, Chair of the arbitration board

J.D. Sharp, Treasury Board Nominee

Joseph Herbert, Bargaining Agent Nominee