OTTAWA — Tens of thousands of federal workers affiliated with the Public Service Alliance of Canada (PSAC) went on strike just after midnight, raising pickets around government buildings and rallying on the lawn of Parliament. Here’s what you need to know about how it will affect Canadian business.

Affected: The government has set up a page with its take on how the strike will disrupt a swathe of departments. The strikers are in two main groups, both under PSAC’s umbrella—staff at the Canada Revenue Agency, and employees in other government departments. 

CRA is hardest hit, with about 37,600 workers involved. Tax filings are still due on regular schedules—including personal income taxes by May 1—said Revenue Minister Diane Lebouthillier. Automated processing and refunds will continue; transactions that require human involvement will, at best, be delayed.

In general, if you can do it entirely online, the service will work; if a government employee needs to do something, it won’t happen or will happen very slowly.

Passport applications from within Canada will be accepted but not processed except for emergencies, said the minister responsible, Karina Gould, and there will be a backlog to deal with afterward.

Behind-the-scenes workers at the Canada Border Services Agency are on strike, which could gum up crossings and goods imports. Some export functions are also affected, such as testing and certification by the Canadian Grain Commission.

Not affected: The CBSA’s front-line border and customs agents are not on strike, so border crossings and customs inspections will continue. Global Affairs Canada staff serving people abroad are on the job.

The government estimates that 47,400 of the 159,000 workers in PSAC’s striking bargaining units will continue to work on essential services, such as processing applications for social benefits.

Two other large federal unions, representing professionals and more technical workers, are not on strike.

What the strike is about: Hours of work and remote-work rules are part of the fight, but more than anything else it’s about money. PSAC seeks to make up for recent high inflation and protect against future price increases; the government says their demands are unreasonable.

“We cannot write a blank cheque,” said Mona Fortier, the president of the Treasury Board.

There’s spin and counterspin over the details, but the gap is big at CRA, where the government said it’s offered a nine per cent wage hike over three years and said PSAC’s last demand was for 22.5 per cent over three years.

PSAC hasn’t publicly put numbers on its demand or the government’s offer but said it’s seeking to “protect our members from inflation and provide fair pay that recognizes the work we do for Canadians.” CRA has not made a wage offer, the union said, contrary to the government’s claim.

For the rest of the striking workers, PSAC said the government has offered 2.06 per cent raises each year from 2021 to 2025, which works out to just over 10 per cent over five years. The union didn’t say what raises it’s seeking.

The government said it’s currently offering those workers 9.25 per cent over three years and PSAC’s opening demand was 14.12 per cent.

The bigger picture: The number of striking workers is large enough that a big wage hike could contribute to inflation; Fortier said part of the federal government’s motive is to avoid undermining other employers.

The Canadian Federation of Independent Business said the strike at CRA is especially damaging for small businesses trying to meet tax deadlines, whose leaders might need advice and clarifications from the agency.

A long strike would ding Canada’s economic growth, Scotiabank economist Derek Holt said in a note, making a (self-admittedly crude) calculation that it could cost the economy roughly $200 million a day.

Back-to-work legislation? No government minister was willing to go there on Day 1; Fortier said the best settlement is one reached at the bargaining table and negotiations are continuing. The Liberals’ governing partners in the NDP said they wouldn’t back a bill, though the Conservatives have supported Liberal strike-ending legislation before.