Canada Post has presented what it calls final contract offers to the Canadian Union of Postal Workers as the cash-strapped Crown corporation faces continuing strike action and a steep drop in parcel volumes.
The offers, made Tuesday to both urban postal workers and rural and suburban mail carriers, include signing bonuses and reduced thresholds for cost-of-living payments while maintaining wage increases of 13.59 per cent over four years.
The Commission concluded that “Canada Post is facing an existential crisis: It is effectively insolvent, or bankrupt,” and that, “The world has changed, and both Canada Post and CUPW must evolve and adapt. Merely tinkering with the status quo is not an option,” according to the Industrial Inquiry Commission report released earlier this year.
Strike impact hits parcel business hard
The ongoing labour dispute has severely damaged Canada Post’s business operations. Delivered parcel volumes are now down 65% from the same time last year, adding significant financial strain to an already challenging financial situation for the Corporation, the company said.
The federal government announced repayable funding of up to $1.034 billion for Canada Post in early 2025 to prevent the corporation from becoming insolvent.
CUPW members launched a nationwide overtime ban on May 23 after collective agreements expired. The union represents about 55,000 workers across urban operations and rural mail delivery routes.
Enhanced offers include bonuses
The final offers build on proposals made May 21, with several enhancements aimed at moving negotiations forward. Employees would receive signing bonuses of $1,000 for full-time workers or $500 for others, depending on their role.
Cost-of-living allowance payments would trigger at a lower inflation threshold of 7.16 per cent instead of the previously proposed 13.59 per cent.
For urban letter carriers using a new delivery system called Dynamic Routing, Canada Post would continue per-piece payments for neighbourhood mail deliveries until January 2030. The company also agreed to remove compulsory overtime requirements.
Operational changes proposed
Canada Post is seeking significant changes to its delivery model to compete with other courier companies that operate seven days a week. The proposals include creating part-time positions with 15 to 40 guaranteed hours per week, complete with health and pension benefits.
The company wants to implement Dynamic Routing at 10 facilities initially. This system, used by major courier companies, plans and optimizes delivery routes daily rather than using fixed routes.
Future employees hired after new agreements are signed would receive health and pension benefits after six months of regular employment, rather than immediately.
Union concerns remain
CUPW has expressed skepticism about several elements of the offers. The 13.59% trigger threshold is far too high and means it will likely never be paid out, the union said about the original cost-of-living proposal, though Canada Post has since lowered this threshold in its final offer.
The union also raised concerns about proposed load-leveling changes that would allow supervisors to redistribute mail volumes between routes without additional compensation for workers.
Negotiations between Canada Post and CUPW have continued for nearly two years, including a lengthy strike and the Industrial Inquiry Commission review. The commission held hearings in January and February with both parties participating.
Canada Post employees can review complete offer details at the company’s dedicated negotiations website.
Background on the dispute
The labour dispute comes as Canada Post faces mounting financial pressures in a rapidly changing delivery market. Since 2018, the corporation has lost more than $3 billion before taxes and expects another significant loss for 2024.
Rural and suburban mail carriers, who number about 8,000 and are 70 per cent women, deliver mail in areas outside major urban centres. About half work from offices alongside letter carriers and postal clerks.
The current contracts affect two main bargaining units: urban postal operations workers and rural and suburban mail carriers, with negotiations running separately for each group.
