The Decibel - What the Canada Post strike says about the power of unions

Episode Date: December 4, 2024

More than 55,000 members from the Canadian Union of Postal Workers remain on strike and at an impasse with Canada Post, after negotiations broke down. Issues of wage increases and usage of gig workers are at the heart of the dispute and the two sides remain far apart. But in recent strikes involving public sector workers, that didn’t seem to matter — not when the federal government can intervene and send them back to work.As postal workers enter the third week of striking, will the federal government soon step in? And what does this strike say about the labour movement right now and unions’ right to strike in Canada?Vanmala Subramaniam, The Globe’s Future of Work reporter, is on the show to talk about the latest on the Canada Post strike, how it fits with other essential services taking work action and how governments intervene in work stoppages.Questions? Comments? Ideas? Email us at [e-mail]

For almost three weeks, more than 55,000 postal workers have been on strike across the country. And that's left mail delivery on hold in the busy holiday season. Small businesses are having difficulty shipping out products and receiving payments. Some people who rely on government checks aren't getting them. And an estimated 85,000 passports are stuck in transit. The two sides, Canada Post and the Canadian Union of Postal Workers, or CUPW, remain far apart on key issues. So far apart that mediation was suspended last week. This is the latest in a number of high-profile strikes we've seen in Canada this year, with some ending in government intervention.

So today, The Globe's future of work reporter, Vanmala Subramaniam, is on the show to explain the key issues in the postal strike, why the government keeps getting involved in labour disputes, and what it all tells us about the state of unions and labour in Canada. I'm Meenaka Raman-Wilms, and this is The Decibel from The Globe and Mail. Vamala, thank you so much for being here. Thanks for having me, Meenaka. So you and I are talking Tuesday afternoon, and we know things could change this week with the strike.

But right now, what is the state of talks between the company and the union? Yeah, so things are sort of in limbo right now. And the Canadian Union of Postal Workers and Canada Post, they were negotiating for about two weeks. And that fell apart when they couldn't come to an agreement over a couple of key issues that we'll talk about later. And a government appointed mediator told them that, look, you guys are too far apart at the bargaining table. Why don't you take some time and see what your positions are, re-evaluate them so you can come back to the table and resume negotiating. That resumption of negotiation hasn't officially started.

But over the weekend, Canada Post presented the union with sort of a new framework that focused specifically on some of the asks around weekend delivery, weekend parcel delivery. And right now, both sides are perhaps a little bit closer than they were, say, two weeks ago, but nothing is certain yet. And these negotiations haven't officially resumed. Okay. Let's talk about these key issues then that are part of the negotiations. What are the issues on the table here, Banmala? Yeah, so there are actually many, many issues because a new collective agreement for all Canada Post workers has not been negotiated since 2018. So the two issues that seem to be sticking points are wages and how to structure parcel delivery, especially on the weekends. So let me just start with wages because it's less complicated. Canada Post has offered the union a wage increase of 11.5% spread over four years. What the union is asking is a compounded wage increase of 24% over four

years. So you can see, absolutely, they're quite far apart at the bargaining table on that. But the context here is interesting because Canada Post's offer to the union of 11.5% is actually below average compared to recent wage increases that other unions have gotten, especially other public sector unions. And, you know, on average, they're getting between three to three point five percent a year of an increase for their members. And so what the union is saying is, look, you guys are just too far away from what we want. So that's one issue. The other more critical stumbling block for both sides is the structure of parcel delivery on the weekends. So Canada Post, they have really pivoted of part-time workers to conduct weekend delivery. And that is a move that Cup W, the union, is deeply, deeply opposed to.

They are not opposed to their workers performing weekend delivery, but they want the existing base of full-time workers to do that weekend delivery. And Canada Post argues that that will cost them way more. So they're saying, look, we want to create this new classification of workers called part-time flex workers who could work, say, one day a week, an eight-hour shift. They get some form of benefits and pension. They are part-time permanent employees of Canada Post and they will do weekend delivery. And this is the critical issue that Canada Post and Cup W are fighting against because the union is saying, look, that erodes the very jobs that we've been fighting to preserve, which is full-time jobs with a defined benefit pension and good benefits. Okay, yeah.

So instead of having the full-time workers do overtime work on the weekends and do that delivery work, Canada Post wants to create this other class of workers, this part-time flex workers, as you were saying. And so that would kind of create two different classes, essentially, of workers at Canada Post. Absolutely. What has the company said about why it wants to make those changes to its workforce? So Canada Post has said that these moves are critical for them to stop losing money,

essentially. They basically say that their labor costs are extremely high and they are struggling to compete with big same day delivery companies like Amazon. E-commerce just exploded during the pandemic and after. So they're trying to remain competitive by having their workers work around the clock or sort of creating a model where they have more flexibility to hire workers when they want, and I suppose, lower the cost of labor overall. But what Canada Post specifically is competing against, and this part is really critical, is the rise of third-party delivery carriers. So companies that rely on independent contractors, you know, sort of an Uber model of working where, you know, you own a van, you get scheduled by a company like Intelcom to use an app to conduct deliveries, you get paid per delivery, the company doesn't really pay you

benefits and a pension and things like that. So it's much cheaper. Yeah, so Canada Post is basically going up against gig workers, right? So that's where they're losing money, it sounds like. Exactly. They're going up against gig workers. And in fact, Jan Simpson, the national president of Cup W, has actually been using that terminology a lot in her communications with the press and saying that Canada Post is trying to gigify the post office. So it's these existential issues for the union that are a major problem in reaching a deal for a new collective agreement. So it sounds like Canada Post has been losing money then recently as a result of these changes in the industry, Vandala. Is that fair to say? Yes. Canada Post is in fact a money losing crown corporation.

Since 2018, they estimate that they have lost $3 billion. And this is despite them being the only carrier that delivers mail in remote and rural regions of Canada, specifically in the third quarter of this year, in 2024, they've lost over $300 million. And they attribute those losses to them becoming less competitive in parcel delivery. You know, third party delivery companies have gained significant ground since 2021. And that has resulted in the market share and partial delivery eroding by more than half. So the figure they have put out is from 62% prior to the pandemic to about 29% in 2023. Wow. Okay. But I think it's important to note, Menaka, that while Canada Post says that they are losing money, the union has said that they are losing money because of the way they're spending money.

So the union specifically points towards the fact that Canada Post has invested hundreds of millions in building a parcel delivery facility in Toronto that really has not yielded the kind of efficiency that the Postal Service was hoping it did. And this, they're saying, is a big reason why Canada Post is actually generating losses, because they're not managing their money correctly, as opposed to not making enough revenue from parcel delivery. Secondly, the union also says that instead of fixating on, you know, streams of revenue from mail and parcels as the way in which you can build revenue, Canada Post should try to be more innovative. And one of the suggestions is why not try to pivot into postal banking? So what the union means by that is offering basic banking services at existing post offices, especially in remote and rural regions that charge people for things like, you know, opening a checkings account, a savings account, just depositing checks. And it's a model that's actually used in countries like Japan, Switzerland, Sweden to generate revenue for national postal companies.

So something else that's happened during the course of the strike, Vanmala, is that the union said that Canada Post last week was actually laying off striking employees. This is not something you hear every day. So I guess my first question was, is this legal? Can they actually do that? That's a really good question. The labor law community and a couple of labor law professors I've spoken to have said that it's completely illegal under Section 94 of the Canada Labor Code to lay striking workers off because they have a right to strike. There's a constitutional right to strike in this country and you can't issue layoffs. But what Canada Post has done is they have confirmed that you can't issue layoffs. But what Canada Post has done is they've confirmed that they have issued temporary layoffs. They wouldn't say why they

did that. They wouldn't say who they issued the layoffs to. And in response to that, the union filed an unfair labor practice complaint with the federal labor board arguing that it's basically illegal to lay workers off. So that that happened last week into the weekend. And it really soured things between the union and Canada Post. And frankly, I'm not sure what Canada Post was trying to achieve by laying these workers off because they are getting paid a strike pay. So they're not getting their full salaries right now. So it presumably is not a labor cost savings thing to lay off workers. So, so far, the government has not ordered Canada Post workers back to work. Could we see that

happen, though? Yeah, so that that's a tricky question, because the federal labor minister, Steve McKinnon, has, and this was in the first two days of the strikes, publicly said that he wants a deal to be reached at the table. He does not want to intervene. They had intervened in the past on other strikes, but in this strike, they want a deal to be reached at the table. That doesn't seem to be happening. And we're, you know, almost three weeks into the strike now. So it remains to be seen whether the federal government will intervene. They have been issuing public statements. When negotiations were suspended last week, the minister called both the union and Canada Post to his office and kind of told them, you're too far apart,

you have to sort out your issues, and it's important to reach a deal. So other than that, we haven't really seen any form of intervention from the federal government on this. We'll be right back after this message. So even though we haven't seen the federal government intervene in the Canada Post situation, traditionally the federal government can use and has used back-to-work legislation in order to get striking workers back to work. It sounds like the government actually uses a slightly different mechanism sometimes now. But VanMal, can we talk about back-to-work legislation and how it functions? How does this

actually work in Canada? Yeah, that's a good question. So, you know, the government has used back to work legislation, the Liberal government rather has used back to work legislation. In fact, they used it in 2018, when Canada Post workers were striking. So it was to get postal workers back to their jobs. The conservative government under Stephen Harper used back-to-work legislation in 2011 to order postal workers back to work in the previous strike. But you see, in order to get back-to-work legislation to be passed, it's easier to be done in a majority government.

That's not the case right now. We don't have a majority government. The liberals used to have an alliance with the NDP that fell apart a couple of months ago. So what the government has done more recently is they've started employing this little used section of the Canada Labour Code. It's Section 107. And what it does is it effectively allows the federal labor minister to order the federal labor board to bring both parties into binding arbitration. So to put it simply, it kind of forces both parties to sit together and work out a deal. And in the process, an arbitrator will order workers back to work. We saw this happen in the summer with striking rail workers. They were workers back to work. We saw this happen in the summer with striking rail

workers. They were ordered back to work using this piece of legislation. And we also saw it more recently with striking port workers. And these workers were deemed essential because they were operating on the border. Okay. So just so I understand, so the back to work legislation, you need a majority in the House of Commons to pass that. So if that sounds like a difficult way to do it, the government can use this Section 107 of the Labor Code. And basically, the labor minister can do that on his own. And he doesn't need kind of the consensus of the House in order to do this then. Absolutely. But you know, one of the problems with the government's recent use of Section 107 to sort of end labor disputes, and this is what a lot of labor experts over bargaining and it some people argue undermines your right to strike in this country I mean if you strike and you know that well the government's

just going to come to the table and order you back to work what's the point of a strike and you know will unions be able to actually negotiate the best possible agreement for their workers within the specter of constant government intervention? You know, that's a question that people have been debating lately. Yeah. So how have workers, I guess, responded to that increase in the use of this Section 107? I think that unions, and I can't speak for union members, but unions have been very critical of it. And labor experts have been very critical of it. They've said that the liberal government is being a little bit too heavy handed lately when it comes to getting people back to work.

And, you know, it's in a way a method of the federal government to pressure parties to reach a deal, which is not the idea behind negotiating a collective agreement. And often you see employers sort of publicly issuing statements. I mean, we saw this in the case of CN and CP, the rail companies that had issued a lockout to their workers back in the summer. You saw them sort of almost publicly calling for the government to intervene by imposing binding arbitration because it was too disruptive for them to have a strike. So it's not a good precedent to set. And actually, the union representing railway workers, Teamsters, they've appealed the federal government's move to impose Section 107 that shut down rail workers from striking. And that is making its way through the Federal Court of Appeal.

That's going to take a while, but we'll see, depending on the result of that decision, whether the use of Section 107 actually holds up in the court of law. So I guess I wonder then too, Vamala, like how does the government decide when to intervene? Why would they make the decision to do that or not? Well, the idea of intervening in a strike is usually because the workers are deemed essential and essential to the functioning of an economy and without which the economic effects of them striking will be too detrimental for the country to be able to handle. And that's the argument they used with the port workers and they used with the railway workers. Canada Post workers, because you can say that they're essential, but you can also say that, you know, letter of mail is declining and people don't use Canada Post the way they used to it. It's an inconvenience that people can't post their mail, that, you know, small businesses

are genuinely suffering because they can't get their packages out, their sales are being affected. But are postal workers essential? I think that is a question that's debatable. It's not something that is definitive. So, Vanimala, you mentioned rail workers going on strike, port workers as well. We've also seen airline workers. It does feel like we've been hearing about a lot of strikes this year. Is that the case? Are workers striking more? Oh, that's such a good question, Medica, because the data is a bit tricky on this one. So it may seem to people that there are more strikes. And I do believe that the public is paying more attention to strikes since the pandemic. But the actual data shows that strike frequency or work stoppages, rather, that's the data that the federal government collects,

have not really increased substantially since 2021. I'll give you some exact figures. In 2024, so far, there have been 124 work stoppages. In 2023, there were 745 work stoppages. But let me qualify this point. This number is very large because of one big strike that happened in Quebec. The Quebec Common Front, a public sector union representing over a million workers went on strike. And because of that one strike involving so many workers, it kind of skewed the data. It didn't mean that more unions and more workers were striking.

It was just that one strike. If you go to 2022, the year of extremely high inflation, we were coming out of the pandemic. Worker unrest was very palpable in the country. There were about 157 work stoppages, so not much more than 2024. So I would argue that there hasn't been a remarkable increase in number of strikes. The data is kind of sort of average, but people are definitely paying more attention to strikes. And why is that? Why are we all of a sudden taking more notice of them?

I think this has to really do with the cost of living. I mean, there's a direct correlation between unions and their momentum bargaining at the negotiating table with employers fighting for their workers to get paid back wages that match inflation rates in 2022 and 2023. So, for example, you know, you had high inflation in 2022 and unionized workers that didn't have the collective agreements negotiated at that time, will now look at their salaries and say, wow, we're actually earning less, you know, in real wages that we used to, because we haven't seen an increase in our wages since we experienced very high inflation. So unions are really pushing at the bargaining table, and they're being loud about it. So

that's getting a lot of attention from the media, from people. And I think members are more spirited in their asks and their demands from unions themselves. They're not willing to take negotiated wage settlements that are less than inflation. And unions know that

and are trying to serve their members. Yeah. So just lastly then here, Vanmala, I guess, all that being said, what does this current moment then tell us about the state of worker and union power really in the country right now? I think, Meenaka, unions are very mobilized right now. And they've been very mobilized actually since the pandemic hit. And I think people became aware of their own rights as workers and how those rights had been eroded and how much the balance of power was in favor of an employer versus an employee.

I think workers are, in general, even non-unionized workers, more aware of that, which is giving unions the momentum to build, to build support amongst their own members, to build new members. However, if you can look at the actual data, unionization rates in Canada are pretty stable. They haven't really increased substantially. There was a little bit of a jump in 2021 during the pandemic where more people wanted to unionize, but, you know, roughly about 30% of the Canadian workforce is unionized. And most of those unions are public sector workers. But I would say that there's an increasing push from, you know, non-traditional unions, like the Starbucks worker union, like the Amazon Workers Union of big companies.

And this momentum is coming from the United States to a large extent, momentum to sign up for new union membership. Right. You know, for more people to become union members. I think we're definitely seeing that happen. Pamela, thank you so much for taking the time to be here. Thank you so much for taking the time to be here. Thank you so much for having me, Manika. That's it for today. I'm Manika Ramanwelms. Our producers are Madeline White,

Michal Stein and Allie Graham. David Crosby edits the show. Adrian Chung is our senior producer and Matt Frainer is our managing editor. Thanks so much for listening, and I'll talk to you tomorrow.