The Decibel - What’s going on with Canada Post?

Episode Date: May 23, 2025

This week, Canada Post received a strike notice from its union representing 55,000 workers. The notice comes just less than a year after the last postal strike back in November. Canada Post is under major financial trouble. A recent report commissioned by the federal government says the postal corporation is in an “existential crisis.” Canada Post has lost $3-billion since 2018 and according to the report, that’s due to a drop in letter mail and parcel delivery competition. This is putting even more pressure on the corporation and the union to come to a deal.Meera Raman is a financial and retirement planning reporter at The Globe. She’ll explain the financial state of Canada Post, what’s been happening with negotiations, and what the impact could be on Canadians.Questions? Comments? Ideas? Email us at [e-mail]

There have been months of on and off negotiations between Canada Post and the Canadian Union of Postal Workers, which represents 55,000 people. Canada Post has had some major financial trouble. A recent report says the postal corporation is in a quote, existential crisis, end quote. That's putting even more pressure on the corporation and the union to come to a deal. And now the chance of a second work stoppage in less than a year is raising questions

about the future of Canada Post and home mail delivery. So we're talking to Mira Raman. She's a retirement and financial planning reporter for the Globe. Mira will explain the financial state of Canada Post, what's been happening with negotiations, and what the impact could be on Canadians. I'm Maynika Ramin-Welms and this is The Decibel from the Globe and Mail. Mira, thanks for being here. Yeah, thanks for having me. So you and I are talking on Thursday and when people hear this, we might already be in a

Canada Post strike, we might not, but either way, just help us understand what's happening here. What's gone on between Canada Post and the Union in the last few weeks? Yes, so it's been to say the, a tumultuous week and a half, about two weeks between Canada Post and the Union. So here's the upshot. So at the beginning of last week, Canada Post had put a temporary pause on talks, bargaining

talks between the Union and Canada Post that was leading up to them bargaining for a couple weeks there. And then after that, a government commission report came out talking about why talks have been breaking down between these two groups. Then after that, the union issued a strike notice saying basically we are prepared to strike on Friday early morning. So that's what's been happening so far.

Okay. And people might remember hearing about a Canada Post strike recently, might be a bit of deja vu here because the Union did go on strike in November just a few months ago. So remind us what happened then. Totally. I would so understand if people were very confused as to why this feels like deja vu. So yeah, you're right. Canada Post went on strike for about 30 days during November and December. People probably really remember this because it was when everyone was scrambling

to get last minute Christmas gifts. Long story short, the government ordered workers back on the job. And that didn't actually end this negotiation. It really just kind of delayed it and kicked it down the line. So the collective agreement that they had, they kind of just pushed that day to May 22nd. So that's really what went down.

And now we're talking about it, of course, May 22nd. So just to be clear, this current proposed strike, it's basically a continuation then of the strike that was happening back in November. Exactly. Exactly. There was just a little bit of a lull while they were bargaining, but now it's kind of coming to a head again. And the newest development actually is that on Wednesday, Canada Post presented an offer to the union saying, okay, here is basically our final offer to you. And the union in response asked for a two week pause, but Canada Post said, no, you have to decide now. When I talk to experts about the offer, have to decide now. When I talked to experts about the offer and kind of Canada Post's potential movement

closer to the union's asks, they said, you know, the union did budge a little bit. You know, they gave a higher higher wages than their previous offer. But they said it really does still show the bargaining power that Canada Post has because they really stuck to their guns on the most contentious points including weekend delivery. Let's talk about what each side is looking for then in these negotiations. What exactly does the union want? What do the workers want? Union workers, you know, they're asking for a bunch of different things, but mainly the

things that they're asking for is fighting against big drastic cuts that Canada Post is proposing. So those cuts look like closing down post offices, stopping door-to-door delivery. If those things get stopped, a lot of union workers could lose their jobs because they don't need as many people. But the main sticking points here

in what union workers are looking for are one, increased wages and two, weekend delivery. Weekend delivery doesn't exist right now for Canada Post. And actually both sides here are okay for weekend delivery. It's just how that weekend delivery actually happens. So what the union wants is they want to have full-time employees working on the weekends delivering parcels. What Canada Post wants is for these to be part-time workers and why the union doesn't like that is

because they don't want to possibly introduce gig-like work model into Canada Post. Okay so that actually seems to be a major point of contention here and just to make sure this is clear, what is a gig-like work model? So this is what Canada Post seems to be advocating for. What would that entail? So when you think of gig work, you think of people who are like Uber drivers or people who might be delivering door dash. These are people who are part-time workers and they may not have as many protections as full-time employees, such as health benefits, pension. So that's the main difference here. Okay, so the union wants those weekend deliveries to be done by full-time unionized employees,

it sounds like, and Canada Post is looking for those gig workers, essentially. Exactly. Okay. We talked a little bit about what Canada Post wants when it comes to weekend delivery, but Mira, is there anything else that that side is looking for in these negotiations? Yeah, Canada Post also wants to introduce something called dynamic routing. So basically this means shifting workers' schedules based on where the most mail volume is during that day.

But the union thinks that this, you know, would be complicated, might mix up like their work schedules and might end up not working with some workers schedules and also might end up resulting in some layoffs. So that's something that they're also against. Okay and behind all of this of course is the fact that Canada Post itself is not doing that well financially. So let's talk about this. What do we know about the corporation's finances? Canada Post has lost at least three billion with a B since 2018. And the main reason why is because there's just a drop in letter mail volume. People aren't using the mail as often.

So they're losing a bunch of money. And they've actually lost so much money that this past January, the government had to give them a billion dollar loan just to be able to cover their expenses for the rest of the year. So just to be clear, Canada Post is not funded by the government though, right? This is kind of a separate loan that is happening. It is a loan, yeah. Okay.

Yeah. Okay, so letter delivery seems to be a big part of it. Is there anything else that's causing this financial trouble for the corporation? There's one other major sticking point is that increased competition. You know, I'm sure a lot of listeners order things from Amazon. Amazon is a major competitor for Canada Post. So as more people turn to Amazon and turn away from Canada Post, that's going to hurt their bottom line.

I guess this gets into the other thing too of like letters versus parcels because often we're not getting so much mail in terms of letter mail these days, but we are getting a lot of parcels these days. Exactly, yeah. You mentioned a recent report that came out about the State of Canada Post. Did it suggest anything about how they could improve their situation? Yeah, I'll give some context about the report.

So when the government ordered workers back on the job, back in December, they also instated this commission, basically to figure out what is going on here and how can we fix it. This commission is led by this former labor negotiator named Bill Kaplan. So he was tasked with figuring this out and delivering a report and he was tasked with delivering that report just a week before the collective agreement ended. So last Friday, last Friday, exactly. It was delivered publicly last Friday. So Canada Post and the union had been negotiating for a couple weeks, but then last Tuesday,

they announced that they wanted to do a temporary pause on negotiations. So this kind of seemingly came out of nowhere. But when I asked experts about it, they said, wait, wait, wait, this government commission report is coming out in a couple of days. And Canada Post, at least what experts said, thinks that this is going to be in their favor. So they kind of want them to wait for that report to come out and then present their offer with that report backing them. In that report, Mr. Kaplan, he really outlined that Canada Post is in dire situation.

They are effectively bankrupt, he said. So he gave some recommendations in the report. What he said is for Canada Post to close more rural post offices and expanding community mailboxes so readers might have those near their home. It's a mailbox that's in one spot and they can go and there'll be a bunch of mailboxes. So readers might have those near their home. It's a mailbox that's in one spot and they can go and there'll be a bunch of mailboxes for everyone in the community as opposed to door-to-door delivery, getting that letter straight on your doorstep. The report also advocated for letting Canada Post have flexibility to hire part-time workers for that weekend parcel delivery. Now Canada Post,

when this report came out, praised the report. They said, you know, we align with these recommendations and they actually were able to deliver their offer soon after this report was delivered. The union, on the other hand, wasn't so happy with the report. They said that it skewed very heavily to Canada Post's position. So yeah, they weren't as happy with the findings in the report. We'll be right back after this message. Samira, earlier we touched on the last Canada Post strike that happened in November and December, and that happened under the previous Liberal government. And in response to that strike,

as you said, former Labour Minister Steve McKinnon essentially called the union back to work. Now though we've got a new government under Prime Minister Mark Carney, what has this current government said about the situation? Yeah, so the new government has kind of had to hop on on what's going on here. So there is a new jobs minister, Patty Hidushi, did release a statement after the report came out last week. And to sum it up, basically, what the minister said was, you know, we hope that both sides can come to an agreement. They appreciate the government commission report

and said that hopefully this report can be a stepping stone to coming to an agreement. Is there any indication that this minister or the government might call the union back to work in the event of another strike? You know, it's so up in the air. What I can say is that when the union was on strike in December, it was really big news because people were needing their mail in this really busy holiday season. So there was more impetus on the government to call back workers at that point because there was so much public pressure. Right now, if that's the same situation, that may happen, but we don't know yet.

Okay. Yeah, this is a good point because that was kind of a strategic move there because that was causing such disruption for Canadians at that holiday season time. But in May, we're not sending as many letters or parcels. Definitely. A lot of experts were telling me that, that the union just had a lot more leverage in the November, December holiday season. But, you know, kicking down these union negotiations has kind of been to their detriment. Yeah. Okay. So it sounds like from this report and from what we're hearing,

there are going to need to be some changes at Canada Post. From what you've heard from experts, Mira, what are the options for the corporation? Yeah, so one expert I talked to put it pretty bluntly, said that there's two options here. Either the government can keep bankrolling Canada Post. Like I said before, they got a $1 billion loan in January. And actually in Canada Post's latest annual report, they said to be able to keep existing, we're going to need this $1 billion loan annually. So they've already said this, that this is something that they need. The other option is just a major overhaul of the organization,

and that would be a heavy lift. This one expert was telling me, you know, that would probably include getting a bill passed in parliament and, you know, a lot of hands in that pot. So both options are not ideal. Okay Let's talk about how the situation is being viewed by the public Mira because of course, we've got a trade war going on at the US We've got a potentially looming recession job security concerns for a lot of people I guess I wonder how Canadians are maybe thinking about this potential labor action. Yeah Well, I think the biggest thing is I think people are a little confused right now. I think they're thinking, like we said before, wait, didn't this already happen? So I think people are playing a little bit of catch up and saying, okay, what is

going on here? What is actually the issue? And people are realizing, oh, this wasn't solved. This has just been kicked down the line. So I think that's the major sentiment right now amongst Canadians. One expert I did talk to though said that even if someone isn't using Canada Post regularly, this is actually a very important labor issue right now in the context of the trade war because job instability is a major issue right now. A lot of Canadians are worried about losing their jobs, are possibly facing layoffs. So whether the union comes out with their demands or not here actually does impact a lot of Canadians in their own job stability and talking about

what labor looks like in Canada right now. Yeah, I imagine a lot of people might watch this job action and kind of see how the public responds to that, kind of a litmus test in a way for our attitudes towards these labor movements right now. Exactly. I wanna just kind of a litmus test in a way for our attitudes towards these labor movements right now. Exactly. I want to just kind of, in our last few minutes here,

just address a question that I think some people might have on their mind of, do we still need Canada Post in this day and age? Because as you referenced earlier, we have a lot more options for deliveries these days, especially when it comes to parcels, a lot of private companies, right? Do we still need this corporation?

So that is a great question, because like you said, there are a lot of alternative companies like we talked about Amazon. But in reality, without Canada Post, it would affect millions of Canadians and small businesses. So just for context, in 2023, Canada Post handled an average of 8.5 million letters and 1.1 million parcels every weekday. Wow. Every day. Yeah, every day. So that's about 30% of the parcel market. Like that's, that's a good chunk. So even if you feel like you aren't using Canada Post, a lot of Canadians are. There also are a lot of Canadians still, even if you get, you know, e-statements from your bank or, you know, from your hydro bill, there are still a lot of people who like to go old school and get things, you know, in the mail by paper and get some government benefits, you know, from in the mail. So these are things

that are still really important. And I think that was something that Bill Kaplan stressed in his report that, you know, Canada Post is a national institution. Even though it is, like a lot of experts say, kind of, you know, a failing national institution right now, it is something that is, you know, in Canada's DNA. So I think a lot of people would want to see it survive. Well, I also think about, like, rural communities, as we talked about a bit earlier too, right? Like if you're in an urban center, you have lots of options for delivery. But if you're in rural Canada, you might not have those options. It's so true.

And I think that that's a big sticking point here too, with Canada Post wanting to close a lot of those rural post offices. You know, a lot of people are against that and for good reason. Mira, it's been great to talk to you. Thank you for being here. Yeah, of course. That was Mira Ramin. She's a retirement and financial planning reporter for the Globe and Mail.

That's it for today. I'm Maynika Ramin-Wilms. This episode was produced by our associate producer, Aja Souter. Our intern is Kelsey Howlett. Our producers are Madeleine White, Michal Stein, and Ali 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 soon.