A Canada Post employee arrives for work in Montreal on Dec. 17, 2024.Christinne Muschi/The Canadian Press
By next Thursday, Canadians could be hit by a second postal strike, just five months after the Canada Industrial Relations Board ordered Canada Post employees back to work.
The Crown corporation announced a “temporary pause” in negotiations on Tuesday to prepare proposals. There’s no clear indication how far apart the two sides remain. What is becoming increasingly clear is that the negotiations should be seen as a last chance to turn around a failing postal service.
Tucked within Canada Post’s most recent annual report is an alarming paragraph that reads, “In the current financial situation, at least $1 billion will also be needed in 2026 and each year afterward to maintain operations and meet our employee obligations.” Translation: Canada Post has run out of money and will soon need to hit up Ottawa for $1-billion, at least, each year to shore up its broken business model.
The first installment is already being paid. In January, the federal government said it would loan the Crown corporation up to $1.034-billion in the current fiscal year. Without those funds, Canada Post says it would have burned through its cash by the end of June. If Canada Post were a private company, it would be headed for bankruptcy.
The core postal service operations have lost $4-billion (and counting) since 2018, as the volume of letter mail dries up. Operating losses hit $748-million in fiscal 2023, but bigger losses are possible for fiscal 2024. The corporation’s third-quarter results show a year-to-date loss of $614-million, more red ink than at the same point of 2023.
Those numbers capture the reality that Canadians use email and social media, not stamps, to communicate for the most part. Negotiations at the bargaining table will be, at best, a start to a painful process of bringing Canada Post into the 21st century.
The Canadian Union of Postal Workers is, if nothing else, consistent. The same union that urged a boycott of postal codes in the 1970s because the resulting efficiencies might reduce jobs is opposed to major structural reform today. In a vivid display of failing to understand the moment, the union floated an initial 24-per-cent compounded wage hike over four years, more than double what management was offering. (CUPW has since trimmed back its wage proposal.)
It might take a significant labour disruption to bring the union to its senses. But a cost-constraining collective bargaining agreement is only one part, and a small part at that, in remaking Canada Post.
Canada Post’s charter was last amended in 2018; a mandatory review is more than a year overdue. That delay, however, presents an opportunity for Prime Minister Mark Carney to push through a modernization agenda.
What might a new Canadian postal service charter look like? It would start by underscoring the importance of an existing facet that is being studiously ignored -- that Canada Post should be “financially self-sustaining.”
Everything else, all service standards, should flow from that requirement. The federal government will have many demands for a billion dollars. Subsidizing postal workers should not be on the list.
There’s no need to dilute the promise of universal service, but beyond that, Canada Post needs new thinking.
The notion of charging higher rates to deliver to more remote areas, to reflect the higher costs, is intellectually elegant. But it could be unnecessarily complex, not to mention a political quagmire. More problematic would be the lesson from Canada Post’s history: simply charging higher prices – the failed strategy of decades past – lessens the pressure for internal restructuring.
But there is a way to accomplish the same end: reducing the frequency of delivery, particularly to rural areas. The amount paid for postal service might be universal, but what you get for the price of a stamp would vary. That step alone would slash the ranks, and cost, of outside workers.
And Mr. Carney’s government should reinstate the Conservative policy of replacing door-to-door delivery with community mailboxes or post office boxes, reversing a foolish reversal by the Trudeau government.
That adds up to radical change at an organization notoriously slow in adapting. But it is a necessary revolution. Management and the union cannot expect Canada Post’s owners – Canadian taxpayers – to continue to underwrite failure indefinitely.