Threat of Canada Post work stoppage worries business owners

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Small businesses are scrambling to ship product, pay suppliers and get paid by the end of the month as a potential work stoppage at Canada Post looms.

Canada Post issued a 72-hour lockout notice to the Canadian Union of Postal Workers (CUPW) on July 5, meaning a work stoppage could occur as early as Friday, July 8.

Many small companies rely on Canada Post to conduct daily business. The Canadian Federation of Independent Business (CFIB) did a survey in 2013 showing 98 per cent of small-business owners use its letter mail services on a monthly basis. About 40 per cent sent 50 or more pieces of mail each month.

Canada Post is usually cheaper than most courier services, especially when sending packages to individual customers. Many small businesses also have yet to invest in moving their accounting services to the cloud, or may find it impractical, especially if their suppliers still deal with paper invoices and cheques.

Jessica Watson, creator of Toronto-based PonyDry, a waterproof hair-styling product, uses Canada Post daily – and exclusively – to ship her product to customers across Canada, the United States and internationally.

"[A work stoppage] would affect my business a lot," says Ms. Watson, who has started looking into the cost of other shipping services in the event of a strike or lockout.

She picked Canada Post to ship her product in large part because it's the least expensive option for her customers.

"Their service is, for the most part, on time, and they ship everywhere in the world," she says.

About 60 per cent of her sales are in the U.S., 30 per cent international and 10 per cent in Canada.

Given that geographic mix, and the higher cost of shipping outside of Canada, Watson says her business wouldn't be able to absorb the extra cost of using more expensive shipping services, especially if there's a work stoppage that lasts for more than a few days. Ms. Watson's other worry is losing customers if the price of shipping needs to increase.

Farishta Zarify, owner of the eBay shop Off Runway Gown, also uses Canada Post to sell her luxury evening gowns, "because it is more cost-effective and there are different options for what I want to ship. As you extend the delivery date you can have better rates."

If there is a strike or lockout, she plans to wait a few days to see if it gets resolved, before deciding to ship her products using a different service.

Ms. Zarify plans to absorb the higher cost of shipping, "rather than disappoint a customer."

"If the customer is flexible on the delivery date I may ask them to wait the couple of days," Ms. Zarify says.

CFIB is urging small business owners to plan ahead about paying suppliers and sending products before a potential strike or lockout at Canada Post.

"In an urban centre you're probably going to be okay because there are other options, but in rural areas sometimes Canada Post is it," says Monique Moreau, the CFIB's director of national affairs.

While she says some utilities and the Canada Revenue Agency have said they won't penalize people for late payment because of a strike or lockout, there are other negative effects.

"It could lead to cash flow problems for businesses waiting for cheques," Ms. Moreau says. "The ramifications can be significant."

John Hamilton, a Canada Post spokesperson, acknowledges some small-business customers have been turning to online services for items, such as invoice payments.

"It's unfortunate, but we understand what customers have to do to protect their business," Mr. Hamilton says.

He also said Canada Post is "working hard to reach a deal and avoid a work disruption."

Mike Palecek, national president of the Canadian Union of Postal Workers (CUPW), says there's "every indication" that Canada Post intends to lock out workers in early July.

"We're trying to avoid a strike or a lockout, but we're not sure that Canada Post has that same goal," Mr. Palecek says, citing how the Crown corporation is preparing customers for a work stoppage.

"It's clear to us that they want to push this toward a labour dispute, right when we're supposed to be having a public review of the future of the post office."

That said, Mr. Palecek says postal workers aren't prepared to accept the cuts being imposed by their employer, which he says threaten jobs security and pensions.

Canada Post locked out workers in 2011, following more than a week of rotating strikes. Postal workers were then legislated back to work.

A CUPW spokesperson said the 24-hour rotating strikes between June 2 and 14 in 2011 only affected "a handful of locations and few major centres, and were designed to be minimally disruptive to the public and to businesses."

CUPW also says it still plans to sort and deliver pension and social assistance cheques in the event of a strike or lockout.