Canada Post's unions want the Crown corporation replaced as administrator of its badly underfunded pension plan, citing potential conflicts of interest and a refusal to fix the plan's problems.
In a letter to the Office of the Superintendent of Financial Institutions, the unions complain that Canada Post failed to meet its obligations to workers when it stopped making mandatory payments into the plan without warning.
"Canada Post cannot simply act in its own narrow corporate interest," the Canadian Union of Postal Workers and the Public Service Alliance of Canada pointed out in the letter to OSFI Superintendent Julie Dickson, which was obtained by The Globe and Mail.
In December, Ottawa granted the post office a four-year reprieve on making special payments into the plan, which had a $6.5-billion solvency deficit at the end of 2012. Canada Post was due to start putting $1-billion of cash per year into the plan in 2014, but claimed in December that it couldn't afford to.
The granting of pension relief coincided with Canada Post's unveiling of a controversial plan to return to profitability, which includes a hefty stamp price hike and the elimination of home delivery to millions of Canadians.
"It appears to us that the pension relief was linked to the corporation's announcements," explained George Kuehnbaum, CUPW's national secretary-treasurer and a member of the Canada Post pension advisory council.
The problem for Canada Post is that it is now losing money, largely because of dwindling mail volumes. The company estimates that its restructuring plan will boost its bottom line by an estimated $700-million to $900-million a year, or less than what it needs to meet its pension obligations.
Securing pension relief might be in Canada Post's "corporate interest," but isn't necessarily in "the interest of all beneficiaries," including roughly 60,000 employees and up to 70,000 retirees, the union letter points out.
Canada Post spokeswoman Anick Losier said the company takes its pension responsibilities very seriously. "We remain committed to administering the plan collaboratively with our bargaining units and with the best interest of all plan members," she said.
If Canada Post was in the private sector it would be forced to seek court protection from creditors if it couldn't keep up payments into the plan, according to the CUPW and PSAC letter, sent Jan. 29.
But because Canada Post is a Crown corporation, Ottawa is on the hook for all of its financial obligations, making bankruptcy unlikely. As a result, the postal service can't make the case that its "pension funding situation was so urgent that it could not give notice to or meaningfully engage with plan beneficiaries before it sought regulatory relief from its sole shareholder, the government of Canada," according to the letter.