Key Takeaways
• Stalled Negotiations: The Canada Post strike, involving over 55,000 employees, has entered its fifth week with no resolution in sight. Key issues include wages, benefits, health and safety, and the role of contractors.
• Impact on Businesses & Residents: Small- and medium-sized businesses have incurred losses, with many struggling to find affordable shipping alternatives. Major courier companies are overwhelmed, leading to delays and increased costs. Residents are also facing high costs and delays for mailing services.
• Pressure for Federal Intervention: There’s growing pressure on the Canadian government to intervene and introduce back-to-work legislation to restore postal services during the critical holiday season.
Less than two weeks before Christmas, and there’s no end in sight to the Canada Post strike. Now, the stoppage is having significant knock-on effects on both residents and businesses.
As the Canadian Union of Postal Workers (CUPW) strike of more than 55,000 employees enters its fifth week, the two sides have not come closer to reaching an agreement. Pressure is mounting for the Canadian government to step in and introduce back-to-work legislation.
Areas of contention include wages, benefits, health and safety, and the role of contractors in the Canada Post system.
Earlier this week, CUPW reduced their wage increase demand from 24% over four years to 19%, including a 9% increase in the first year. Canada Post maintains an 11% increase is what’s feasible, citing billions of dollars in cost increases if it were to agree to the union’s terms.
“While we recognize that CUPW has moved on its wage demands,” Canada Post said in a statement, “the union’s proposal remains well beyond what the Corporation can afford, given its significant losses and deteriorating financial position.”
In a CTV News interview with Vassy Kapelos, Jon Hamilton, vice president of strategic communications and stakeholder engagement for Canada Post, says the union’s current requirements in wages, new vehicles for rural areas, additional full-time employees and other “big-ticket items” would cost Canada Post at least $2.9 billion over the next four years, on top of current costs. The government entity ended 2023 with a loss of nearly $750 million, up from $548 million at the end of 2022, and was on track to end 2024 in the red for the seventh consecutive year before the strike began.
“We need to bring some flexibility into our models so that we can provide the kinds of services that Canadians and Canadian retailers and small businesses are looking for, like weekend services,” said Hamilton. “Yes, that’s going to require some part-time employees because then you can build for the ebb and flow. But 95% of our delivery personnel are already full-time.”
Jim Gallant, a negotiator and spokesperson for CUPW, said in an interview on CTV News that Canada Post doesn’t have a solid plan to dig itself out of the expense hole it’s currently in.
“I hope [the negotiations don’t] require federal intervention,” he said, “but Minister [Jean-Yves] Duclos needs to tell Canada Post that these jobs need to be meaningful, solid jobs. We heard that message, but we don’t think Canada Post did because they’re still talking about part-time jobs that we won’t allow to come into our collective agreement.”
Labour Minister Steve MacKinnon has said Ottawa will not intervene in the dispute. Federal mediation was put on hiatus two weeks ago.
“It’s time for these parties to reflect the great responsibility that they have, get on with these negotiations, get a deal and return the postal service to Canadians,” he told the CBC.
Costly Contingency Plans
Meanwhile, businesses across Canada that rely on the postal service are scrambling to figure out alternative plans. Other delivery companies, like DHL, UPS, FedEx and Purolator, were already under pressure to deliver packages on time due to holiday demand. FedEx has instituted a temporary five-parcel limit at retail drop-off locations, and the U.S. Postal Service suspended deliveries to Canada on Nov. 29, two weeks after the strike began.
eShipper, a critical service that links smaller e-commerce firms with major delivery companies, recently had services curtailed – UPS put a 48-hour freeze on eShipper parcels and Purolator has considered a daily pickup limit of eShipper items.
Smaller regional logistics companies don’t have the capacity to deliver over wide areas and concentrate mostly on cities.
“The [companies that] are taking that Canada Post volume are unable to absorb that volume during peak season,” Maggie Barnett, CEO of fulfillment company LVK Logistics, told Max Garland of Supply Chain Dive. She added that once the strike ends, it will take at least 10 days for operations to normalize.
“Everyone’s going to come out of the gate sluggish, and there’s going to be a lot to do because there are things just sitting in the system,” she said.
According to data from the Canadian Federation of Independent Business (CFIB), an advocacy group, small- and medium-sized companies have so far incurred losses of at least 765 million CAD due to the ongoing strike. For many of these firms, holiday sales are critical to their survival. A good number of them still rely on Canada Post to get those orders out the door, and CFIB has called on the government to intervene.
The CBC reports that small businesses are having a hard time finding affordable alternatives – many of them rely on Q4 sales to stay afloat, and they say they’re having to pay more to ship the items than the items cost. They’ve also been compelled to charge customers more to account for the increase.
Residents too are feeling the pinch – one resident paid more than $35 to mail a letter through FedEx, which took over a week to deliver it. Another resident in rural Ontario was told a Christmas card to her son in Vancouver would cost $57 by UPS and $62 by FedEx.
Promo Continues To Pivot
The impact on promotional products companies has varied since mid-November. Angela Jamieson, director of customer experience at Brand Blvd (asi/145124) in St. Catherines, ON, said anything going to a PO box needs an alternative address, though those instances are few and far between. “We’re proactively trying to get things out a day or two early due to the high demand our major couriers are facing so we can allow extra time,” she said.
For others, it’s been a daily challenge. Danny Braunstein, the Winnipeg-based director of client success for Counselor Top 40 distributor BAMKO (asi/131431) in Canada, said many clients still pay by cheque through the mail – that’s resulted in delays in receivables and increased costs for the customer who’s had to mail by courier rather than the post.
“Canada Post is the only option for shipping to some remote locations in Canada and is often the most cost-effective option for higher-volume bulk shipments,” Braunstein added.
The biggest impact, though, has been the “trickle-down effect” on service levels at the major courier companies, said Braunstein. “Our vendors that use third-party logistics providers like eShipper, which has had its services put on hold, are having to completely rejigger their operations,” he said. “It’s certainly not a great situation for any Canadian, particularly with the holidays coming up.”
Alexandre Brault, co-founder and vice president of Tango Communication Marketing (asi/341612) in Saint-Leonard, QC, said that his company’s major projects and programs that normally depend on Canada Post have had to be transitioned over to other companies, and that’s resulting in increased shipping rates.
“One good thing,” he said, “is our customers are understanding.”
