What is it about a postal strike that leads to instant panic over the future of the post office? Although neither Canada Post or the Canadian Union of Postal Workers (CUPW) have made existential demands in the current labour dispute, it took only a matter of days for Canada’s broadcaster, the CBC, to ask if the post office will survive. And it did so in the most provocative manner possible, featuring Carleton Professor Ian Lee on two of its national flagship programs calling Canada Post a “Potemkin post office” requiring a complete re-engineering to end mail delivery in urban areas, franchise all post offices and eliminate more than 50,000 jobs. How anyone at CBC thought this was a useful contribution to coverage of the postal strike issues is mind boggling.
Canada Post’s mandate to deliver mail to Canadians is not a strike issue and there are no proposals to change what we expect when we put something in the mail. Lee nevertheless ranted on about the costs of door to door mail deliveries as if it was a relevant matter. But hardly anything Lee had to say was about the strike issues and how they can be resolved. His intervention was designed to muddle opinion over the real issues and leave an impression that any measures sought by the union to improve services or protect good jobs will hasten an imminent disaster.
The actual issues in the strike are practical choices, mostly over the parcel delivery business or the “Courier, Express and Parcel (CEP) sector.” Canada Post remains the single largest player in the sector despite losing market share during and after the Covid crisis. Pre-Covid Canada Post had 62 per cent of Canadians; that’s down to 29 per cent now. Both Canada Post and the CUPW want to build back that business, but the union is determined to secure wage increases that keep pace with their private sector competitors and to limit the use of part time workers.
While Lee paints a picture that the entire mandate of Canada Post is unsustainable, the corporation has a more modest agenda to move closer to the business models of its private sector competitors like UPS and FedEx. They are unionized but in the case of UPS, over half of its workforce is part time.
Canada Post’s mostly full time workforce is not the source of the problem in the parcel business. UPS and FedEx became the beneficiaries of the massive shift to online selling by leveraging their US and global logistics and state of art technologies and tracking systems, and most of all their relations with online sellers. Canada Post could have been more nimble by leveraging its advantages and national logistics, and it would have had a willing partner in the union. It was a management failure.
A case in point at issue now is Canada Post’s limited capacity to make weekend deliveries which have been gobbled up by UPS and other competitors. A good part of that business can be brought back, and CUPW has proposed weekend deliveries that includes part time workers. The strike issue is that the limits and impacts on the existing workforce must be negotiated.
Wages at UPS and FedEx are higher than at Canada Post, even with their part time workforce. The average wage for a Canada Post delivery driver is $28 per hour, compared to over $30 per hour at UPS, and UPS average wages will rise to about $38 an hour at the end of the current collective agreement with the Teamsters. CUPW’s wage demands will still leave them slightly behind unionized workers at UPS.
Total labour costs at Canada Post are slightly higher than its parcel delivery competitors because of the defined benefit pension plan that provides retirement security for 55,000 CUPW members and 30,000 more Canada Post workers and managers. Canada Post wants a different and lesser pension plan for new hires – a non starter with the union membership. The pension plan they have is fully funded with a surplus, and the company is currently enjoying a contribution holiday. Who would want to mess with that?
Moreover, unionized workers at UPS also have a defined benefit pension plan that was improved in their last round of bargaining. However Canadians listening to the CBC heard nothing about the industry standards in the unionized parcel industry. According to Lee, Canada Post should retreat from the national parcel business altogether because the upstart gig sector has a cost structure for deliveries well below Canada Post and UPS/FedEx.
It is the case that almost half of the Canadian CEP sector is now diversified among smaller low cost companies like Intelcom/Dragon Fly where gig and contract work is common, wages hover at or just above minimum wage, and there is no pension plan. It is a convenient distraction for Canada Post to have Lee make good jobs at Canada Post the problem rather than the growth of precarious work in the gig sector. The solutions to precarious gig work require labour law reforms and union organizing – they won’t be found in Canada Post bargaining.
There is one more smoke bomb that Ian Lee wants to throw into the middle of the Canada Post strike. The crown corporation is losing money and that can not stand. A postal apocalypse is in the mail, says Lee.
Canada Post’s balance sheet has never determined its mandate or public support. For a century the post office was a direct government service until the Crown corporation was created in 1981. It wasn’t until 1987 when it began to make money. It lost money in 1994, 1999, 2009, 2013, 2016 and has every year since 2018. However, after all of that, 64 per cent of Canadians oppose privatization of the post office, and far higher numbers oppose service cuts, post office closings and even price increases for stamps. Not even the Canadian Federation of Independent Business supports privatization or a major downsizing of Canada Post, pointing out that eight in 10 small businesses rely on Canada Post.
To the contrary there has been strong and steady public support for postal workers in successive rounds of bargaining. That’s why the government has not been keen so far to intervene in this dispute. Unless that changes, the strike will end when a contract is negotiated.
It is not by accident that Ian Lee was trundled out with his neo-liberal apocalyptic declaration that the entire post office model is sinking like the Russian battleship Potemkin and it’s time to abandon ship. It is a sad comment on the CBC that it fell for the trick.
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