Canada’s decades-old labour model framing the working relationship between advertisers and commercial acting talent seemingly came undone this week, leaving many across the industry—including key leaders at top agencies and associations—unsure what happens next.

The breaking point came when the Alliance of Canadian Cinema, Television and Radio Artists (ACTRA) unexpectedly announced a new agreement with the Association of Canadian Advertisers on Tuesday. It is a one-year deal that is believed to be very similar to the previous deal, with a 2% pay increase for its members.

What made it unexpected was that the Institute of Canadian Agencies did not sign the deal.

For decades the National Commercial Agreement—covering everything from rates to usage rights and working conditions—has been a tripartite agreement between ACTRA, the ACA and the ICA, and the three had been in negotiations on a new agreement for almost a year.

But by the third week of April, an irreconcilable rift emerged between the ICA and ACA (more on that below). The two associations split, and ICA continued to negotiate with ACTRA on its own ahead of 12:01 a.m. on April 26. On April 25, ACTRA again rejected the ICA proposal, and the deadline passed at midnight. However, the next day (April 26) ACTRA and the ACA announced a new agreement on their own, catching the ICA by surprise.**

It is, to say the least, a highly unusual situation. In short, ACTRA says it and the ACA have reached a new collective agreement for the industry covering every business that had signed the previous agreement—including the ICA members.

The ICA says that is not the case. It contends that the previous agreement has expired, that the new agreement would only apply to anyone who signs it and therefore its member agencies are no longer required to work with ACTRA. “[W]hatever ACTRA and ACA have done, it is their deal,” said the ICA in a statement provided to The Message on Wednesday. “ICA has nothing to do with it. ICA and signatory agencies are no longer bound to any NCA.”

The Message spent the last couple of days trying to make sense of things and get some answers to key questions.

Who does this cover? ACTRA is the leading union for commercial acting / performer talent in Canada, representing 28,000 Canadian professionals across the country.

“Our members appear in thousands of professional commercials every year,” said Eleanor Noble, president of ACTRA National, in a statement announcing the agreement with ACA. “This agreement ensures we will continue to be paid fairly and to work safely, in a stable, collaborative industry.”

The National Commercial Agreement has traditionally been negotiated with ACA and ICA. But those two associations represent only a small fraction of the signatories, which cover a wide range of companies including other ad agencies, production companies and “third-party” players like payment providers (this is important, and we’ll come back to this).

While the ACA negotiates the agreement, and has asked its board to ratify the new agreement, its members are not bound by it. If they choose, advertisers can become signatories, said ACA CEO Ron Lund. “However, I am not aware of any ACA members who are signatories.”

In terms of agencies, only 16 ICA members are signatories (or were signatories to the previous agreement), meaning an agency can be in the ICA and not subject to the agreement. And independent agencies can sign the agreement without being part of the ICA.

“We have over 200 signatories to the agreement, the vast majority of which I would say aren’t members of the ICA or the ACA,” said Marie Kelly, ACTRA national executive director and lead negotiator. But regardless of whether or not they are part of the ICA or ACA, ACTRA’s position is that this new agreement is a collective agreement, meaning all of those 200+ previous signatories remain bound by this new agreement.

“When we sign a renewal collective agreement, everyone who is signatory in the past remains a signatory under it if it gets ratified,” said Kelly. “When that happens, all previous signatories under a collective agreement remain a party to that collective agreement.”

Again, ICA says this is not so, with one executive from an ICA member agency telling The Message: “I think what it means is right now, we don’t have an actor agreement so we’re union free—and it’s long overdue.”

What about all the non-union agencies? Obviously, they’re not directly impacted by this, but what ICA is advocating for could potentially have an impact on the market for talent, since its members—and potentially any agency that was previously bound by the NCA—could now start to use non-union talent, something they could not do before.

Why didn’t ICA sign the new agreement?  The union, the ICA and ACA started negotiating a new agreement last May. Tuesday’s statement from the ACA and ACTRA said that the new agreement provides a “window to jointly work towards modernizing and simplifying the existing agreement, informed by a recent agreement between advertisers and the Screen Actors’ Guild in the United States.”

But both ACTRA and the ICA agree the split was almost entirely over one issue: The ICA’s demand that its members be able to work with non-ACTRA talent if they so choose.

Previously, any agency that was a signatory to the agreement could only work with ACTRA talent. ICA’s CEO, Scott Knox, said this has become a disadvantage to its members if their clients—who are not bound by the agreement—want to work with non-union talent. “They want to use ACTRA talent when the client says so, and then non-union when the client says so. The thing is, they couldn’t do that.”

But opting out of working with the union seemingly contradicts one of the most basic tenets of labour agreements. Certainly that’s the position of ACTRA. “The fundamental core principles of any union collective agreement is that the work under that collective agreement goes to the membership of that union,” said Kelly. “We were not prepared to agree to change the entire system that we have operated under for 60 years, and to do so only for 16 agencies.”

But the ICA says the principle applies in reverse: That the workers covered by the agreement should only work for those who have signed the agreement. And increasingly in the last 15 years, that has not been the case.

In 2007, ACTRA wanted to make it possible for its members to work on the growing number of international projects being produced in Canada, said Knox. “The ACA and ICA agreed to that, and we created the route for third-party organizations to act as fronts for non Canadian businesses.” If an international agency wanted to shoot in Canada using ACTRA talent, it did not have to sign the NCA, it could work with one of the payment companies that had signed the agreement.

But since then non-union agencies in Canada have been increasingly going this route. If you see ICA mentioning “levelling the playing field” this is what they are talking about: ICA says its members—and by extension, any signatory agency—are at a disadvantage to those non-signatory, non-union agencies who can work with ACTRA talent if they choose to do so.

The ICA wanted an opt-out provision in the new agreement, and ACTRA wouldn’t consider that, though it says it was willing to discuss other provisions.

“We provided a lot of solutions to the third-party situation that was put on the table by the ICA and ACA, and we were prepared to work through some solutions,” said Kelly. “Unfortunately, the ICA was not prepared to have those discussions. What they really wanted was preferential treatment for the 16 ICA agencies to be able to work ACTRA when they chose to do so, and not work ACTRA when they chose not to.”

Why did ACA sign a deal without ICA?  With talks stalled, a mediator was brought in who concluded they were at an impasse and set a deadline of 12:01 a.m., Tuesday April 26. The ICA said it continued to negotiate with ACTRA, but the union did not make “any meaningful movement towards a level playing field.”

However, the ACA agrees that ACTRA “provided a number of proposals to address the ‘levelling the playing field’ issue,” said Lund. “Instead of responding/developing a counter-proposal, which is a normal step in bargaining, ICA unilaterally decided to not only put the opt-in/opt-out proposal back on the table, but they made it a condition to continue negotiations.

“Putting this issue back on the table raised a concern by the ACA that ACTRA may have a legitimate charge of bad faith bargaining, which the ACA did not want to be associated with,” he said.

As the deadline approached, the possibility of a strike or a lockout started to seem possible, said Lund, and the ACA was eager to avoid any disruption. “Non-ICA agencies who were stressed about either outcome were coming to us worried that one of the two were going to disrupt scheduled shoots, but was hearing nothing from ICA,” said Lund.

By signing a renewal agreement, ACA said it prevented any disruption and buys another year to negotiate another deal.

So what happens now? That’s the big question. In the short term, both the ACA board and ACTRA membership have to ratify the deal before the end of May. As part of their agreement, ACA and ACTRA also agreed to extent the old agreement until May 31. Assuming the new deal is ratified, they say a new collective agreement will be in place for the industry.

But even in the last two days, the ICA has been digging in its heels: There is no extension, there is no new collective agreement, it says. At 12:01 a.m. on Tuesday its members were no longer required to use ACTRA talent. They want to have that option, said Knox. They just want to have the option of not using ACTRA talent.

On Thursday, Knox sent a letter to ACA board members asking them not to ratify the deal. “This ‘new’ deal is actually the same old deal, except for one big difference—the ICA and signatory members have rejected what we consider to be a failed agreement and we are no longer part of it,” he wrote. The fact that the ICA hasn’t signed means it’s a “brand-new” contract, without any existing signatories from the previous contract.

And on Friday morning, it released a “legal POV” from its lawyer James G. Knight, of Filion Wakely Thorup Angeletti LLP. “It should be pointed out that the NCA is not a collective agreement and is not subject to any statutory labour regime,” he wrote. And while the ACA and ACTRA both agreed to extend the old agreement for one month and “rollover” the NCA for another year, they were not entitled to do so without the ICA sign-off.

“Indeed, despite a request made to each of ACTRA and the ACA, the ICA has not even been provided with a copy of these agreements,” wrote Knight. “To be very clear, you cannot extend or rollover the NCA when one of the parties is not a party to the extension or rollover. What has actually happened is that ACTRA and the ACA have made brand new agreements.”

In an interview with The Message Friday morning, Knight said it’s unclear what happens next if an agency which now thinks it’s no longer bound by an agreement with ACTRA tries to work with non-ACTRA talent. “That’s the big question… we’re all trying to find our way on this,” he said.

But the ICA’s position is that its members can work with whoever they want, and while he does not speak for non-ICA agencies, it seems likely to be true for any agency that was a signatory to the old agreement and has not signed the new agreement. “If I were acting for any of them and they asked me, that would be my view; that they have to sign on again to whatever the ACA and ACTRA have done.”

However, there’s also some suggestion that ACTRA could try to prevent those ICA members from using ACTRA talent going forward.

“We hope that ICA agencies will continue to work under the renewal agreement, but it is our understanding that ACTRA will not allow ICA agencies to work through third-parties,” said Lund.

And Knight said they have already seen “some pressure tactics” from ACTRA trying to get talent agencies and third-party payment services to not work with ICA members.

ACTRA did not respond to a request for comment on this assertion, but it seems almost certain this story is far from over. “I think there’s going to be a bunch of lawyers getting a lot of billable hours in May while everybody tries to figure this out,” said one agency executive.

**This story has been updated to include a clarification about the events ahead of the negotiations deadline at 12:01 a.m. April 26.