One week after 50,000 mail carriers went on strike, troubled Canada Post on Friday presented a new contract offer that rolls back some previously promised benefits and raises the likelihood of job cuts, further inflaming union workers.
Canada Post said its proposed collective bargaining agreement is largely unchanged from its final offer on May 28, but no longer includes a CA$500 to $1,000 signing bonus due to the company’s deteriorating financial position. It also plans to eliminate lifetime job security provisions for employees in the urban unit while it undertakes a long-sought transformation and said it will cut jobs.
The company said attrition, voluntary buyouts and early retirement are the preferred methods of downsizing, with layoffs being a last resort. Union officials will receive six months notice before any workforce adjustments go into effect.
“We waited 45 days for offers that are worse than what we rejected in August. Canada Post must have known that there is no way we can accept these and is clearly wasting even more time,” Canadian Union of Postal Workers’ National President Jan Simpson said in a statement.
The national postal operator said the new contract proposal represents all it can afford amid mounting losses and pressure to downsize. It is offering a 13.59% wage increase over four years. Mail carriers are asking for a 19% increase.
Canada Post has lost $2.7 billion since 2018. Letter mail volumes have dropped by 60% since 2006, while delivery points have increased dramatically. Its share of the parcel market has been reduced by more than 50% over the past seven years.
“The Corporation is proposing a fair and balanced approach to managing the size of its workforce in the Urban bargaining unit. With these changes, Canada Post will continue to provide good jobs and need a strong workforce – but one that is smaller in size and more flexible in the future. The best job security comes from organizations that are strong and self-sustainable,” Canada Post said in a statement.
CUPW banned overtime work in response to the May offer, then switched to an embargo on delivering bulk advertising mail before calling a strike after the Canadian government on Sept. 25 instructed Canada Post to move ahead with streamlining and modernization initiatives officials say are desperately needed to reduce excess overhead and regain customers. Those events were preceded by a 32-day strike that ended when the government intervened late last year.
The strikes have undermined user confidence in Canada Post’s reliability and driven parcel shippers to private sector competitors that provide last-mile delivery service.
Downsizing effort
Canada Post has insisted since talks started 21 months ago that it wants to begin hiring part-time workers to enable weekend parcel deliveries, implement dynamic routing for letter carriers based on changing volumes, and even out work levels by assigning extra mail to carriers who finish their routes early.
The Liberal government last week endorsed those changes and directed Canada Post to reduce delivery frequency, expand the use of community mailboxes instead of delivering to each door and close some post offices in close proximity to each other. The current collective bargaining agreement doesn’t allow Canada Post to close post offices.
Canada Post has 45 days to present a plan on how to move the postal system forward in accordance with the government’s instructions for change.
“Removing this provision would provide greater flexibility to align the corporation’s post office network with the modern needs of Canadians, particularly in these overserved communities. It also enables the company to better focus limited resources on protecting services in rural, remote, northern and indigenous communities,” Canada Post said.
CUPW argues that closing post offices will actually worsen financial performance.
Doug Ettinger, Canada Post’s CEO and president, issued a letter to Canadians explaining the government’s announcement and the proposed changes to the mail system.
“To align our operations to the modern needs of the country, we’ll need to be leaner. Serving a country as large as Canada will always be labour-intensive, but we’re overstaffed. With thousands of employees eligible to retire over the next five years, we can minimize the impact on our people,” he wrote.
“Canadians have been changing the way they use the postal service, and we must change with them. We also understand the importance of our service to small businesses across the country, and we need to get this right. As we move forward, our commitment to Canadians is to be transparent, fair and respectful. We will be attentive to concerns and responsive to questions.
“While our labour situation is extremely challenging, we also remain committed to reaching new agreements at the bargaining table. It’s vital these agreements reflect our financial reality and support the changes we need to make — while helping us stand on our own, without taxpayer funding,” Ettinger said. “Our goal is to provide an affordable, reliable and sustainable service to every Canadian – one that lifts our national pride by strengthening our connections to each other.”
Many postal workers question Canada Post claims of financial hardship, pointing to high executive salaries, and hundreds of millions of investment dollars in a modern processing facility and electric vehicles that they suspect are being counted as operating expenses rather than capital expenditures.
Write to Eric Kulisch at ekulisch@freightwaves.com.
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