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What a postal strike means Add to ...

By midnight Thursday, Canada Post could be on strike for the first time in nearly 15 years.

The threat of a strike by nearly 50,000 letter carriers and other postal workers is unwelcome news for consumers, businesses and governments, but it's hardly the dreaded, life-altering event it once was.

Cast your mind back to 1997. Facebook and e-vites didn't exist. You couldn't browse the Internet on your phone or tablet. And there were few good alternatives to paying bills by mail.

Fearing economic carnage, the federal government waited just 16 days before ordering the striking posties back to work.

This time around, Canada Post's fading presence in the lives of Canadians is front and centre in the dispute. The Crown corporation, which is facing dwindling revenues and a crushing $3-billion pension deficit, is determined to significantly cut pay and benefits for new hires, creating a two-tiered work force.

One group will be treated as if the Post Office were still in its glory days; the other more like ordinary private-sector workers.

On Monday, the Canadian Union of Postal Workers issued a legally required notice, warning that its members are prepared to go on strike at midnight Thursday.

But some of the businesses that depend the most on Canada Post seem more concerned about fixing Canada Post's financial viability and limiting ever-escalating postal rates. In a letter to Canada Post chief executive Deepak Chopra, the 108,000-member Canadian Federation of Independent Business urged the company to "make the necessary changes now to contain future costs." CFIB president Catherine Swift endorsed the two-tier system, saying that "with revenues decreasing, Canada Post needs to better manage its costs."

The issues

The only issue that matters to Canada Post is neatly captured in one figure - 17 per cent. That's the drop in the volume of letters it's delivered since 2006.

The problem of falling volume is compounded by a demographic reality. As the country grows, the postal service must deliver less mail to a greater number of addresses - 200,000 new homes every year.

"We are facing tremendous challenges as a company," Canada Post spokesman Jon Hamilton said. "We need to face that reality."

So Canada Post is determined to create a two-tier workforce. Pay for new hires would be cut to $17.50 an hour from $24 an hour and all new hires would have to work five more years (to age 60 instead of 55) to collect a full pension after 30 years service. They also want to cut the maximum vacation to six weeks from seven for new employees. The company backed off an earlier bid to move all new employees to a defined contribution pension plan, versus the defined benefit plan existing workers enjoy.

The Crown Corporation also wants to keep a tight lid on wage increases, offering a four-year contract, with increases of 1.9 per cent in each of the first three years and 2 per cent in the fourth.

The union, on the other hand, wants the status quo plus more generous pay hikes - 3.3 per cent in Year 1 and 2.75 per cent in Years 2-4. They're also fighting a bid by Canada Post to end the practice of banking sick days.

The impact

There will be pain and dislocation if there's a strike. That's a given.

Businesses and governments are already preparing for the worst. Mail-order companies are shifting their shipments to private parcel companies. Manitoba Public Insurance is setting up claim centres to deliver cheques to flood victims and other claimants. And cities across the country are preparing to deliver welfare cheques directly to recipients.

Margaret Malewski is a scuba equipment manufacturer in Burnaby, B.C., and she's already shipping new orders via Fedex and UPS, absorbing rates that are often twice as much as Canada Post rather than lose business to rivals.

"This is another pain in my ass," complained Ms. Malewski, president of Liquivision Products Inc., which sells dive computers. "This is just one more thing that I have to deal with."

The banking and insurance industries also rely heavily on Canada Post to send statements, bills and issue payments.

The Canadian Bankers Association is urging Canadians to sign up for online banking, which allows customers to keep track of transactions and bills online.

Some insurance contracts could also be affected. The law requires that insurance policies must be cancelled by registered mail or in person.

In Toronto, the city has decided not to put June welfare cheques in the mail. Instead, recipients can arrange to pick up their cheques or arrange direct deposit. The City of Hamilton has likewise set up an elaborate set of alternatives for people and businesses who deal with the city. It plans, for example, to use its Convention Centre to distribute welfare cheques.

The government reaction

Federal Labour Minister Lisa Raitt urged the two sides to reach a negotiated settlement.

"Any work stoppage would impact Canada's economic well-being," Ms. Raitt said in a statement. "We are currently going through an economic recovery, which remains fragile."

 

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