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Postal dispute was never about pensions, new hires

It should not have come as a great surprise to anyone that Ottawa would ultimately order 48,000 postal workers back on the job.

Successive Liberal and Conservative governments have forced an end to disputes at Canada Post six times since the mid-1970s. This marks No. 7.

The process has become a ritual dance between Canada Post and the Canadian Union of Postal Workers (CUPW).

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The two sides negotiate aimlessly for months, the union votes to strike, the two sides inch closer to compromise as undelivered mail piles up and then a government-appointed arbitrator splits the difference. Both sides look ahead to the next time.

What makes this episode different is that workers fell into a trap laid by Canada Post and the Harper government. This isn't Ottawa stepping between two squabbling parties. It's the government and the post office essentially conspiring to impose a contract they believe is necessary to cope with the unkind economics of shrinking mail volumes.

Until the Crown corporation locked out workers June 14, many Canadians might not even have noticed there was a strike as CUPW staged rotating walkouts across the country. That's how significantly the post office's role in the national economy has faded in the age of e-mail and online transactions.

The lockout created the pretext Ottawa needed to act.

But the union badly miscalculated. Instead of sending the parties to conventional arbitration, where neither side gets everything it wants, the Harper government is essentially imposing a settlement.

The federal legislation dictates a wage settlement that is worse than Canada Post's last offer - wage hikes of 1.75 per cent this year, 1.5 per cent in 2012 and 2 per cent in 2013. Other key issues will be put to so-called "final offer arbitration," where an arbitrator will take each side's best offer and choose one.

The arbitrator's hands are tied because the legislation requires him to take into account conditions at comparable postal services, the financial viability of Canada Post and the solvency ratio of the pension plan.

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The union would have been wise to accept what the company put on the table, even if it meant lower starting wages for new hires and a modestly less generous pension (employees would have to work to age 60, rather than 55, to collect a full pension).

Yes, new workers won't be treated exactly the same. But it's a far cry from many private-sector companies, where two-tier pensions, wages and benefits are increasingly common.

Canada Post also wants to end the practice of allowing workers to bank unused sick days - a privilege few other Canadian workers enjoy.

All these concessions hardly seem worth being out on the picket line for.

The dispute was never about pensions and new hires. For both sides, it was about a smaller Canada Post and more flexible work rules in the large urban sorting plants where Canada Post has invested $2-billion in new equipment. These machines will allow the postal service to save roughly $250-million a year, largely by delivering more mail with 7,000 fewer workers, according to an internal CUPW bulletin to members.

"Canada Post is determined to eliminate work through service cuts, contracting out and new technology, especially the new machines and work methods associated with modernization," the bulletin warns.

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The real long-term threat to CUPW is that its membership will inevitably shrink as Canada Post's monopoly letter-delivery business fades.

So CUPW used the dispute to push back. It wanted Canada Post to become larger, rather than smaller. It urged the post office, for example, to get into banking, getting rid of super mailboxes and allowing letter carriers to check up on the elderly along their routes. Higher postal rates would pay for the expanded service.

Workers seem to be out of touch with a stark reality: Canada Post isn't a make-work project. Its main business is in inexorable decline. Since 2006, the average number of pieces of mail delivered to Canadians has fallen 17 per cent, replaced by e-mail, online billing and other electronic transactions. At the same time, Canada Post is required by its mandate to get the mail to roughly 200,000 new addresses every year.

The challenging math leaves no good alternative to a smaller post office.

And in spite of the government's seemingly harsh back-to-work order, CUPW may just find that most Canadians are with the Harper government on this one.

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About the Author
National Business Correspondent

Barrie McKenna is correspondent and columnist in The Globe and Mail's Ottawa bureau. From 1997 until 2010, he covered Washington from The Globe's bureau in the U.S. capital. During his U.S. posting, he traveled widely, filing stories from more than 30 states. Mr. McKenna has also been a frequent visitor to Japan and South Korea on reporting assignments. More

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