Canada Post is in trouble. Here are the facts
Canada Post employees are once again on the brink of a strike, with the Canadian Union of Postal Workers threatening to suspend mail and parcel delivery across the country starting Friday. The union, which represents 55,000 of Canada Post’s employees, has stated that if there is no progress on a new collective agreement, its members will walk off the job. This means that no new mail will be accepted, and any items already in the system will be held until the strike is resolved.
This potential strike comes on the heels of a previous labour dispute that took place in November and December, lasting 32 days and causing significant disruptions during the holiday season. Despite efforts to resolve the issues during that time, the dispute was never fully resolved. The expired collective agreement was extended until May with a five percent wage increase, but negotiations for a new deal have failed to progress.
The financial situation at Canada Post is dire, with the organization facing significant losses in recent years. The last time Canada Post made a profit was in 2017, and since then, it has lost a staggering $3 billion. The annual loss in 2023 alone was $748 million, leading to the need for a $1 billion loan from the federal government to stay afloat. By 2026, Canada Post estimates that it will require $1 billion annually from the government to meet its financial obligations.
One of the major challenges facing Canada Post is the decline in letter delivery. The organization’s monopoly on delivering letters means it must service every address in Canada at the same price, regardless of the cost. However, with the decline in letter volume from 5.5 billion in 2006 to 2.2 billion in 2023, the revenue generated from letter delivery no longer covers the expenses of servicing all addresses in the country.
In contrast, parcel delivery, where Canada Post faces competition from private companies like FedEx and UPS, has seen a decline in market share for Canada Post. In 2019, Canada Post delivered 62 percent of the parcels in the country, but by 2023, that number had dropped to only 29 percent. The organization attributes part of this loss to its inability to deliver on weekends, a service that many private companies offer.
Canada Post also faces challenges regarding job security for its employees, with the collective agreement stipulating that most employees cannot be laid off under any circumstances. This has led to criticism of the organization for offering “jobs for life” to its workers. Canada Post argues that this situation contributes to its financial struggles and is unsustainable in the long term.
As the potential strike looms, both Canada Post and the union have expressed a willingness to return to the bargaining table. However, with the deadline approaching, the future of mail and parcel delivery in Canada remains uncertain. The situation highlights the urgent need for reforms within Canada Post to ensure its sustainability in the face of evolving market dynamics.
