The Union of Northern Workers (UNW) says three days of mediation talks with the Government of the Northwest Territories have failed.
In a memo sent late on Saturday to some of the 4,000 territorial government staff who are members, the UNW said mediator Vince Ready adjourned talks on Friday, a day early, with the two parties "still far apart."
Though the union stopped short of declaring strike action inevitable, Todd Parsons - its president - called the territorial government's stance "outrageous and insulting" in the memo and urged members to "stay tuned."
Ready, an experienced mediator jointly appointed by both parties, will issue a report within two weeks according to the union.
What happens next is unclear.
Prior to this week's talks, the union had suggested a second round of mediation could be a possibility if any progress was made. Any chance of further talks now appears remote.
The UNW has been recruiting strike captains in readiness for a strike, just as the territorial government told Cabin Radio last week its departments were "actively preparing" for that eventuality.
Strike training began in Hay River this weekend and will shortly begin in other communities, the union said.
The territorial government did not have a spokesperson immediately available for comment on Saturday night and had not issued a statement.
In its memo, the union said the territory had made some – but not enough – movement on non-monetary issues, and no movement at all on the crucial issue of wage increases.
Since collective bargaining began in January 2016, the union has demanded three percent year-on-year pay increases. The territory has consistently stated it can afford nothing of the sort, instead proposing a two-year pay freeze followed by significantly smaller increases.
The union says the territory should spend less money on infrastructure and more on salaries. The territory says it doesn't work like that and cutting back on infrastructure spending would be economically self-defeating.
"It is a really sad state of affairs when, after all this time, the government still thinks employees should subsidize its overly ambitious infrastructure plans," said Parsons in Saturday's memo.
A union member and territorial government worker, who asked to remain anonymous as they are not authorized to speak on the issue, told Cabin Radio: "It's definitely causing a lot of anxiety and stress.
"There's not much communication from the UNW bargaining team to its members in regards to which issues, other than the wage increases, are holding back any agreement. I sure hope that they have a better reason than an impasse on wage increases to walk away from mediation.
"Needless to say, this going to make for one hell of a Monday."
Strike action could begin in November. Any such action, in winter with Christmas approaching, is likely to prove deeply disruptive for both workers and residents.
Earlier this year the union claimed its members had backed its potential plans in a strike mandate vote, but refused to release any detailed results.