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Workers set up a picket line near the federal building on Bay Street North Wednesday morning after contract talks broke down between their union and the government the night before.

Thousands of picketers circled the block past the building at 55 Bay St. N. as members of the country's largest federal public-service union, the Public Service Alliance of Canada, walked off the job.

Federal employees across the country were expected to set up picket lines at roughly 250 locations. The union is calling the strike action one of the largest in Canadian history.

The bargaining groups involve approximately 155,000 federal public servants, including 35,000 Canada Revenue Agency workers. As a result, the union and the government have warned of disruptions when it comes to tax season, employment insurance, immigration and passport applications, as well as slowdowns at the border.

Wage increases have been a key issue at the table, with the union pushing for annual raises of 4.5 per cent over the next three years to keep pace with inflation and the cost of living. The Treasury Board of Canada Secretariat says it offered the union a nine per cent raise over three years on Sunday, on the recommendation of the third-party Public Interest Commission.

Editor's note: This story was updated to correct the day of the walkout. It took place Wednesday.

-With files from The Canadian Press

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