Canadians are bracing for another postal strike – the second in six months, as the clock ticks down to a Friday deadline. In the latest developments, Canada Post has put a new offer on the table but says it won’t accept the union’s offer to delay the strike while negotiators take a couple of weeks to consider it.
It’s pressuring the union to accept the latest offer before the planned labor action on Friday. The Canadian crown corporation is warning that it faces an existential threat and needs to make foundational changes.
When negotiations were put on hold last week, the Canadian Union of Postal Workers, CUP-W, accused Canada Post of walking away from the table. That came before the release of a report commissioned by the federal government in Ottawa that questioned the viability of the crown corporation’s failing business model.
In his 162-page report, Commissioner William Kaplan said Canada Post faces an existential crisis. He recommended structural changes including phasing outdoor-to-door delivery for individuals but not businesses, more part-time workers, and lifting the moratorium on the closing of rural post offices.
“We’re disappointed but not surprised. There’s no doubt the government ordered this report. Paid for this report and likely had some expectations of the report,” Kaplan said.
Jim Gallant is the chief negotiator for the postal workers union.
“It looks like what the report does, dismisses everything that the union said and the hundreds of submissions from municipalities, the public, indigenous communities, and charities because the report shows that all of those entities agreed with the union. However, the report does not agree with the union, it agrees with the employer,” Gallant said.
Gallant said during the commission, Canada Post provided no evidence of any of their problems.
However, Kaplan had written that Canada Post is not sustainable in its current model. The last time the postal service made a profit was in 2017 –and since then has lost $3 billion. In January the federal government loaned it a billion dollars to stay afloat, and by 2026, at the current rate, it will need a billion dollars a year in order to meet its financial obligations. In 2023, the postal service delivered 2.2 billion letters, about 40% of the 5.5 billion delivered in 2006.
John Hamilton is with Canada Post – he said the results of the commission of inquiry are a sobering and straightforward look at the problems facing the corporation.
“Canada Post is in trouble. The past has come home to haunt us. We’ve been trying to make changes, we’ve been trying to bring about changes to modernize our delivery approach through the use of more part-time workers, and good part-time jobs over the weekends. But we’ve been facing constant resistance from the union, who’s been trying to hold on to the status quo,” Hamilton said.
Hamilton said trying to hold on to that status quo is a death sentence for Canada Post. He said the corporation wants to get a deal with the union, but it can’t give up modernization efforts.
The other part of the business where Canada Post is failing is parcel delivery. Millions of parcels are delivered every year, but Canada Post is getting less and less of the share.
Ian Lee is with the Sprott School of Business.
“Canada Post in the last 24 to 30 months has lost half of its market share in parcels, not because the market is disappearing but because they’re not competitive,” Lee said.
Lee believes the case for keeping rural post offices open no longer exists.
“We do not need 8 thousand post offices because we don’t go there anymore. They cost a billion and a half to two billion a year. I’ve argued that they should be completely franchised or closed. So, you kill the post offices, and or most of them and you kill home delivery. Right off the bat, you’ve pulled out around 2 billion dollars of savings to reinvest into parcels,” Lee said.
Yesterday Canada Post put a new offer on the table, the union representing 55,000 employees wanted two weeks to look at it, but Canada Post said “no,” it wants a quicker resolution, adding that further delay is in no one’s interest. A union response could come as early as today.
