Canada Post is confronting a critical financial situation, described as “effectively insolvent” by a newly released federal report.
The Industrial Inquiry Commission (IIC), established to address the ongoing labour dispute between Canada Post and the Canadian Union of Postal Workers (CUPW), issued today (May 16) a comprehensive 162-page report outlining seven key recommendations aimed at ensuring the Crown corporation’s sustainability.
Key Recommendations:
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Amend the Postal Charter: The IIC suggests phasing out daily door-to-door letter mail delivery for individual addresses, replacing it with community mailboxes where feasible. Daily delivery to businesses should continue.
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Lift Moratoriums: The report recommends ending the moratoriums on rural post office closures and community mailbox conversions, stating that these measures are financially unsustainable.
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Revise Collective Agreements: Incorporate all items previously agreed upon during collective bargaining into the two collective agreements. Efforts should be made to resolve partially agreed-upon items.
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Introduce Flexible Staffing: Canada Post should have the flexibility to hire part-time employees for weekend parcel deliveries and to manage fluctuating volumes during the week. These employees should receive the same pay rates and benefits, proportionally, as full-time staff.
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Optimize Work Assignments: The report calls for changes to collective agreements that currently prevent assigning additional work to employees during paid hours, aiming to reduce inefficiencies.
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Implement Dynamic Routing: Pilot and eventually adopt dynamic routing to adjust delivery routes based on daily volume, minimizing trapped time and overtime.
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Streamline Postage Rate Approvals: Simplify the approval process for postage rate increases to allow for more timely adjustments in response to market conditions.
Commissioner William Kaplan highlights that Canada Post’s traditional business model is no longer viable due to a significant decline in letter mail volumes and increased competition in parcel delivery. The report emphasizes that without immediate and substantial changes, the corporation’s financial health will continue to deteriorate.
Labour Relations:
The IIC notes that prolonged and unresolved labour disputes have exacerbated Canada Post’s challenges. The inability to reach new collective agreements has led to service disruptions and loss of customers to competitors. The report urges both Canada Post and CUPW to collaborate on implementing the recommended changes to ensure the organization’s future viability.
Negotiations between Canada Post and CUPW have been fraught with challenges. After a 32-day strike in late 2024, which ended with a government-mandated return to work and an extension of the collective agreements until May 22, 2025, both parties resumed talks with the assistance of a federal mediator. However, progress has been limited.
Canada Post recently paused negotiations to prepare new proposals, citing a lack of meaningful progress. CUPW criticized this move as “reprehensible,” expressing frustration over the lack of a clear timeline for resuming discussions.
If no agreement is reached by May 22, CUPW will be in a legal strike position, raising concerns about service disruptions. Businesses, particularly small enterprises reliant on mail and parcel services, are bracing for potential delays. The previous strike in 2024 resulted in significant delivery backlogs and financial losses for many companies. Stakeholders across the country are urging both parties to find common ground to avoid further disruptions.