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The entry to the Canada Post operation is padlocked in Halifax on Wednesday, June 15, 2011. Canada Post has suspended urban mail operations across the country after 12 days of rotating strikes by its 48,000 unionized urban workers. THE CANADIAN PRESS/Andrew VaughanAndrew Vaughan/The Canadian Press/The Canadian Press

Canada Post abruptly shut down operations across the country Tuesday evening, locking out some 50,000 workers just as rotating strikes ended in Canada's two largest cities.

In a brief statement, the corporation said it had accrued roughly $100-million in losses since job action started and that the shutdown will affect urban centres. It did not say whether rural mail delivery would continue.

Canada Post's decision appeared to catch employees off-guard: members of the Canadian Union of Postal Workers said the corporation had not notified them of its plans in advance. Workers in Toronto were surprised not to be allowed into facilities when they showed up to begin their shifts late Tuesday.

"While we'd hoped to avoid a disruption to service to Canadians, we feel we can't continue to let this drag on," Canada Post spokesman Jon Hamilton told The Canadian Press.

"It's having a huge impact on the business, it's having a huge impact on our customers and our employees and the time is now to get a deal with the union."

Union representatives said Canada Post's latest move was not entirely unexpected.

"I see it as a manoeuvre on the part of the corporation to try and get the government to legislate us back to work and legislate some type of unfavourable collective agreement on to us, as opposed to allowing the free and collective bargaining process to work itself out," said Gerry Deveau, CUPW national director for the Ontario region.

The union has been staging rotating, single-day strikes in various cities and towns for nearly two weeks. The largest work stoppages, in Toronto and Montreal, happened Tuesday.

The federal government had appeared to rule out back-to-work legislation earlier this week, but the nationwide lockout could change that.

The dispute largely turns on pension reform.

"Canada Post and CUPW remain far apart on several fundamental issues and there has been no progress made at the negotiating table for weeks," the corporation said in a statement. "We believe that a lockout is the best way to bring a timely resolution to this impasse and force the union to seriously consider proposals that address the declining mail volumes and the $3.2-billion pension deficit."

Canadians had already been feeling the effects of the labour dispute, not just from the rotating strikes, but because Canada Post had scaled back mail delivery in cities to Mondays, Wednesday and Fridays before declaring the lockout. The union had said the scaling back was an attempt by the corporation to provoke a general strike.

The current country-wide suspension of urban mail is likely to have a wider impact.

Although the labour dispute does not include rural postal workers, who fall under a different contract, even the post office has acknowledged that a prolonged lockout could mean they would eventually have no more mail to deliver.

"There will be nothing moving through this country," Mr. Deveau said. "If the government doesn't intervene then I do see this potentially being a very long lockout."

Both sides have said they expect to continue negotiating through Wednesday.

With reports from The Canadian Press