Canada Post and the union representing thousands of postal workers have reached tentative agreements, the parties announced Monday.DARRYL DYCK/The Canadian Press
Canada Post and the Canadian Union of Postal Workers (CUPW) say they have reached tentative agreements, after two years of contentious bargaining in the contract dispute that brought uncertainty to another busy holiday season.
The Crown corporation and the union representing 55,000 mail carriers say they’ve agreed that strike or lockout action will not take place during the ratification process, with a vote set to take place in early 2026.
Canada Post, union reach tentative agreements that include higher wage hikes, enhanced benefits
Here’s the latest on the contract dispute that has been ongoing for more than two years.
What’s in the tentative agreements?
Neither Canada Post nor the union have shared details, but the postal service says the tentative agreements announced Monday include higher wage increases, enhanced benefits and a weekend parcel delivery model. They cover both the Urban Postal Operations and Rural and Suburban Mail Carriers bargaining units.
CUPW is recommending members vote to accept the tentative deals.
Mail carriers will vote in early 2026, and if approved, both agreements would be in effect until Jan. 31, 2029.
What has been going on with bargaining?
The mail service and union negotiated with the help of a federal mediator since late October, and reached agreements in principle on Nov. 21 that ended weeks of rotating strikes.
Talks continued and the tentative agreements were reached Monday.
The union began a nationwide strike in September, after the federal government, the sole shareholder of Canada Post, ordered the mail carrier to make changes to the organization and cut costs. In response, Canada Post said it would end door-to-door mail delivery and shut down some post offices.
CUPW characterized the move as “an attack on our postal service and workers.”
In October, the union switched to rotating strikes after meeting with the federal minister responsible for Canada Post, Joël Lightbound, to voice concerns about Ottawa’s orders for Canada Post to transform.
Before engaging the mediator in October, Canada Post had presented a new offer to the union that contained many of the same terms as the “final offers” it presented in May, including a 13.59 per cent pay increase. But it removed a signing bonus and included a temporary suspension of its “job security for life” terms.
Could Canada Post workers still strike or be locked out?
No, all strike and lockout activities have been suspended during the ratification process of the tentative agreement. A vote is expected to be held in early 2026.
However, if members reject the deal, job action could resume and disrupt deliveries next year.
Canada Post job losses
Canada Post expects to lose 16,000 employees through retirement or voluntary departures by 2030, with another 14,000 leaving by 2035.ETHAN CAIRNS/The Canadian Press
During Canada Post’s annual meeting in November, CEO Doug Ettinger said the Crown corporation expects to lose 30,000 employees to retirement or voluntary departure over the next decade in a bid to reign in costs and become a “leaner organization.”
Canada Post will aim to use “attrition first” to downsize its workforce, he said. It employed roughly 62,000 people at the end of last year.
Canada Post expects to lose 16,000 employees through retirement or voluntary departures by 2030, with another 14,000 leaving by 2035.
It’s not clear if more layoffs will be needed to meet Canada Post’s financial targets. The company already went through a wave of management layoffs this year.
Chief financial officer Rindala El-Hage told the annual meeting that the corporation is “effectively insolvent,” with losses in the first nine months of the year topping $1-billion – $239-million more than the loss posted in the same period in 2024.
On the same day the deals in principles were announced, the corporation reported a $541-million loss before tax for its third-quarter earnings, the largest quarterly loss in the company’s history.
Canada Post sending new offers to union with aim of moving talks forward
Why has bargaining taken so long?
Last year, workers walked off the job in November and December, disrupting deliveries during the critical holiday shopping season.DARRYL DYCK/The Canadian Press
The CUPW represents roughly 55,000 Canada Post workers and labour talks have been ongoing for two years with the Crown corporation.
The union and Canada Post were at odds over how to restructure the postal service in an age where letter mail volume has significantly decreased and private delivery couriers are flourishing.
Last year, workers walked off the job for 32 days in November and December, disrupting deliveries during the critical holiday shopping season, but were then ordered back to work by the federal government.
Canada Post has been under financial strain for years. It has lost at least $3-billion since 2018, driven by a drop in letter-mail volume, and has had to use a $1-billion federal loan to cover operations for this year.
The problem, mainly, is that letters used to be the corporation’s major source of income, but people and businesses rarely send them any more. In 2006, Canadian households received an average of seven letters each week; the average in 2023 was two.
A government-commissioned report aimed at breaking the deadlock and preserving Canada Post as a “national institution” called for sweeping changes to ensure its survival – including phasing out individual door-to-door mail delivery. The postal service praised the report while CUPW disagreed with much of its findings.
Rivals, such as Amazon, FedEx and UPS have also claimed a huge chunk of the parcel-delivery market. In a 2023 report, the post office said those competitors offered “faster, cheaper and more convenient services,” owing in part to a reliance on “low-cost, contracted labour” that deliver up to seven days a week. The Crown corporation wanted to expand service to weekend delivery, an issue that became a sticking point in negotiations.
Roughly three-quarters of Canadians already get their mail through community, apartment and rural mailboxes, while one-quarter receive mail directly at their doors, according to the federal government. It said that converting the remaining four million addresses to community mailboxes will generate almost $400-million in annual savings for Canada Post.
With reports from Sara Mojtehedzadeh, Vanmala Subramaniam, Meera Raman, Danielle Groen and The Canadian Press