Canadian warehouse workers have signed the first-ever collective agreement with Walmart, a breakthrough labour organizers are calling a “historic and powerful step”.

But the union says the deal with a corporation long hostile to organized labour is only an opening salvo in a broader fight to unionize major employers across the country.

In May, workers in Mississauga, Ontario, signed a contract with Walmart, the world’s largest employer, that includes a pay bump, guarantees over working conditions and a lump sum payout to settle allegations of unfair labour practices.

“These members were determined to have workplace democracy and they stuck with it,” said Lana Payne, president of Unifor, Canada’s largest private sector union. “Their courage and determination, their decision to be part of a collective bargaining table with one of the biggest corporations in the world, is why they made labour history.”

Workers at the high-volume distribution warehouse – which serves one of the biggest markets for Walmart in Canada – first decided to unionize in 2024. It took two years before both sides agreed on a contract.

Payne said the victory came amid a deliberate strategy by the union to target parts of the business workers that could exert the most influence. While retail locations have unionized in the past, the powerful distribution centres that supply more than 100 brick and mortar stores and oversee online orders have proven elusive.

“We felt that we needed to put serious effort into targeting the entirety of the supply chain,” she said. “This victory will create momentum across the warehouse sector.”

In the case of the Mississauga effort, Walmart raised wages for other workers in the region but not the distribution centre that had unionized. As part of the newly signed collective agreement, Walmart will pay a lump sum to settle an unfair labour practice complaint. The company did not respond to a request for comment.

The dramatic transformation of the economy in recent years has raised the power of technology and e-commerce companies, reshaping the nature of how workers organize, said Payne.

“Our labour laws are not built to be able to contend with massive corporations who can fight unionization, and so they frustrate the system,” she said. “When you look at the situation we’re in, it’s not unlike what workers faced 70 years ago, when unions were really making kind of groundbreaking strides with auto workers or steelworkers or mining workers.”

Unifor has already opened a second front in its battle: an Amazon facility in British Columbia, a province where laws are friendlier to organized labour.

Recently, British Columbia’s labour board found that Amazon unlawfully withheld scheduled wage increases from workers at the facility, despite giving raises to every other Amazon facility in the region. The company will probably have to pay back more than $1m in back wages.

Amazon said it misunderstood the labour code and believed it “prevented us from making changes to pay for employees at t[he warehouse]”.

But the labour board’s decision means that the employees previously left out will now get their “updated compensation as soon as possible”.

“We’re glad to be able to do that,” an Amazon spokesperson, Eileen Hards, said of the pay updates. “Taking care of our people has always been our priority, and that remains true as we continue to follow the legal process and bargain with the union in good faith.”

While two sides struggle to agree on a contract, the labour code in British Columbia gives the government the ability to impose a first contract if an agreement isn’t reached..

Recently, an independent mediator found that Amazon was responsible for the breakdown of first-contract bargaining and recommended the dispute be resolved through binding mediation-arbitration.

Jim Stanford, an economist and director of the Centre for Future Work, said Amazon and Walmart were among companies that have huge power over pricing – not only over consumers, but also what they pay suppliers and workers.

“There’s an incredible contradiction between [Walmart] being one of the largest, most profitable companies in the world, and many of its workers having to turn to food banks because they can’t buy groceries,” Stanford said. “But with a union and a contract, workers have a chance to win a fairer share of the wealth that they’re producing.”

Stanford said that in recent years, there has been an “attitudinal shift” whereby workers understand their employers may take advantage of them, making their jobs more precarious and undermining their compensation. So despite the challenges, the recent success will probably lead to more union drives.

“Workers around the world have been struggling for years to try and win a share of Walmart’s profits in the form of higher wages and better jobs – and it has been a David and Goliath struggle, because of Walmart’s power and their stridently anti-union attitudes,” Stanford said. “But the collective agreement with Walmart is clear. There are things that fundamentally change how one’s work life unfolds, and it will make a huge difference to these workers.”