Commentary

Canada Post Corporation's Manufactured Crisis

The Corporation is threatening to lock its union workers out over declining volumes of mail and parcels that are the direct result of its threat to lock the workers out.

By Ryan McGreal
Published July 07, 2016

Canada Post Corporation and the Canadian Union of Postal Workers (CUPW) have been negotiating a new collective agreement since last November, 2015.

The previous contract drastically reduced sick leave benefits and included no pay increases for the life of the contract. It was imposed on the union after the Corporation locked them out in 2011 and then the Harper Government legislated them back to work.

This time around, after several months of unproductive bargaining, the company presented CUPW with an offer that would refuse to address the 30 percent pay inequity of mostly-female Rural and Suburban Mail Carriers (RSMC) compared to mostly-male Street Letter Carriers (SLC); replace the defined benefit pension plan with a defined contribution pension plan for new employees; and include only very modest pay increases below the rate of inflation.

CUPW presented the offer to its members for a vote, and over 90 percent voted to reject it. However, the union has pledged that it remains committed to negotiating a new collective agreement and that its members will not go on strike.

Meanwhile, on Tuesday, July 5 the Corporation issued 72-hours' notice that it will be in a position to lock the union members out effective Friday, July 8.

Astonishingly, the Corporation justifies locking out its workers and shutting down its operations because of "rapidly deteriorating volumes" of mail and parcels due to customers preparing for a possible work stoppage.

In other words, Canada Post has manufactured the very crisis it is using as an excuse to respond to the crisis with a lockout.

Last-Minute Political Appointment

Meanwhile, the Federal government is currently undertaking a public review of Canada Post to develop a strategic plan for its future growth as a public service. However, the current senior management is driven by a narrow, business-oriented focus on cutting costs.

Canada post 'Community Mail Box' on Inverness near Knyvet (RTH file photo)
Canada post 'Community Mail Box' on Inverness near Knyvet (RTH file photo)

Ugly politics are on full display here. As a crown corporation, Canada Post is ultimately managed by the Federal Government, and its CEO, Deepak Chopra, was appointed by the former Harper Government.

An order to extend his political appointment was made on July 28, 2015, just a week before the writ of election was dropped. That order did not actually take effect until February 1, 2016 - long after the election that replaced the Harper government with a Liberal majority.

As part of its commitment to adopt open, merit-based political appointments, the Liberal government sent letters to 33 last-minute Harper appointees and asked them to step down so that their replacements could be selected through the new process.

Sian Matthews, chair of Canada Post's board of directors, responded with a letter touting Chopra's qualifications for the job (he previously worked at Pitney Bowes, an American e-commerce and shipping company) and denying that his appointment was political.

Pension Plans

There was once a time when unions were understood to fight to improve the working conditions, pay and benefits of employees in Canada. Those improvements had the effect of improving conditions for all workers, not just union members.

Back in 1981, CUPW went on strike to achieve paid maternity leave for its female members, the first Canadian union to do so. The right to paid maternity leave was eventually adopted across Canada under the Employment Insurance program and extended to both parents.

Now, unions are pilloried merely for trying to hang onto the benefits their forebears won for us, let alone seeking to achieve new improvements.

Canada Post wants to push new hires from the current defined benefit pension plan to a defined contribution plan. A defined benefit (DB) plan specifies how much an employee will receive in pension income once they retire. In contrast, retirement income under a defined contribution (DC) plan depends on how well the plan is doing, eliminating income security in retirement after an employee has paid into the plan for their entire career.

Under a DB plan, the employer assumes the financial risk to ensure the plan is funded, whereas under a DC plan the financial risk is offloaded entirely onto individual employees.

This trend toward DC plans started around 15 years ago as part of a broader shift toward a more neoliberal, individualistic approach to public policy that has widened and deepened inequality in our society.

Just because the shift from DB to DC has recently been widespread in today's labour market, that doesn't make it okay. All workers deserve predictable pension income, but a whole generation of younger workers today will be at the mercy of the stock market once they are old enough to retire.

Correcting the Misinformation

In this age of quick factoids and ugly commentary, there is no shortage of misinformation on just about any issue you can imagine, and the Canada Post labour dispute is no different. Here are some facts to try and counter the nonsense:

Canada Post is financially self-sufficient. Your tax dollars do not pay your letter carrier's wages; that comes entirely from revenues generated by letter mail, parcel and flyer delivery.

Canada Post is profitable. The company earned $99 million in profits in 2015 and has been profitable nearly every year out of the past 20. As a public service, Canada Post should be revenue-neutral and maximizing service, not aiming to maximize profits at the cost of reduced service.

The job is hard. Like, really hard. My spouse is a letter carrier in Hamilton and her route includes 1,700 points of call and covers roughly 17 kilometres of walking a day, while carrying a satchel loaded with 20-30 lbs of mail. She does that during heat waves, like this week, when it's over 30 degrees Celsius out, and during the bitter cold of deep winter - and in all kinds of weather, including thunderstorms and blizzards. Most new employees end up quitting because the job is so difficult.

Postal service still matters. While the volume of letter mail has been falling, lots of correspondence - including legal documents - will still need to be delivered physically for the foreseeable future. Canada Post is the only company that moves mail between any address in any part of Canada to any other for a standard price, no matter how remote. No private company has Canada Post's reach or capacity, and competitors like UPS, FedEx and DHL are already struggling to accommodate the increase in parcels as businesses nervous about a lockout switch to competitors.

Ryan McGreal, the editor of Raise the Hammer, lives in Hamilton with his family and works as a programmer, writer and consultant. Ryan volunteers with Hamilton Light Rail, a citizen group dedicated to bringing light rail transit to Hamilton. Ryan writes a city affairs column in Hamilton Magazine, and several of his articles have been published in the Hamilton Spectator. He also maintains a personal website and has been known to post passing thoughts on Twitter @RyanMcGreal. Recently, he took the plunge and finally joined Facebook.

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By nobrainer (registered) | Posted July 07, 2016 at 13:03:32

Hmm, get people worried about a lockout so they pull there business and the work dries up so the company has to do a lockout, almost sounds like a Harper appointee trying to wreck the company so they can privatize it and sell it off to their cronies for pennies on the dollar.

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By rednic (registered) | Posted July 07, 2016 at 13:25:51

The war on good jobs continues.

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By Crispy (registered) | Posted July 07, 2016 at 13:44:36

You forgot to mention the dogs that seem to hate anyone in a uniform and the fact that Canada Post will hire someone on as a "casual" worker for years, while they work full time hours without benefits.

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By DowntownInHamilton (registered) | Posted July 07, 2016 at 17:22:36 in reply to Comment 119700

That's a standard across the board now, not limited to the federal government. A friend who works for the LCBO has been a casual worker for 4 years and the average time it takes to become a full time employee is about 12! So, he continues to work 40 hour weeks with no benefits, not paid vacation, no pension, but then again, this is common in just about every industry now. My company also takes part in this - however we employ a constant contract-to-full time goal with all employees (usually 3-6 months is our aim for conversion).

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By ryan (registered) - website | Posted July 07, 2016 at 15:49:54 in reply to Comment 119700

You're right - slips, trips, falls, collisions, assaults, dog bites, stress fractures, worn-out knees, worn-out hips, repetitive strain injury from the ergonomically-defective two-handed system - the risk of injury is very high.

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By KevinLove (registered) | Posted July 07, 2016 at 20:24:35

There are good reasons why lockouts are very rare in the private sector. When a labour contract expires, usually the workers continue working under the terms and conditions of the expired contract while negotiations continue for a new contract.

If the negotiations drag on, inflation hands the workers what effectively amounts to an annual pay cut, since wage rates are frozen at the rates in the expired contract.

However, according to the information in the link provided by Ryan, this is not a lockout. A lockout occurs when the company management decides to temporarily cease using the services of its unionized workers. In a traditional factory environment, they will literally lock the doors of the factory so the workers cannot get in.

In other words,

Lockout = Management chooses to temporarily stop employing the unionized workers.

Strike = Union decides to temporarily stop working for the company.

According to Canada Post, a lockout is not what they plan to do. From the link:

As of Friday, July 8, 2016, the terms and conditions of the current collective agreements will no longer apply. Under the new terms and conditions, employees will continue to receive their regular pay and some benefits such as applicable prescription drug coverage. Other items will be cancelled in line with the statutory minimum conditions established under the Canada Labour Code. The Corporation will also have the flexibility to adjust staffing according to the amount of work required.

In other words, a reduction in benefits and in featherbedding. That's not a lockout. By private sector standards, this is a rather tough negotiating tactic. After all, if management objects to any existing benefits, why did they agree to them in the previous labour contract? It is also probably an unwise and unduly provocative negotiating tactic in a company that traditionally has a rather toxic labour relations environment. This kind of negotiating tactic is not going to improve that environment.

But this is not a lockout. The workers can still work, and receive their regular pay and some benefits. If the workers then choose not to work, then that is a strike.

Comment edited by KevinLove on 2016-07-07 20:25:26

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By The99Percent (registered) | Posted July 08, 2016 at 09:05:44

Oooook.

  1. 99 million dollars in profit for a company that employs 65,000 or so people is nothing if everyone needs a pay raise. It equates to about 1500/employee, that's without any unexpected upkeep or other expense/investment.

  2. You guys are acting like this casual->indeterminate thing is uncommon. It's literally the case in every single public service job. Jobs are casual (5 mos) then term (1-5 years) and then indeterminate. I've never seen position that did not go through that progression, which takes time not only because of position scrutiny (which, as a tax payer, you want) but also because the bureaucracy is enormous.

  3. Canada Post is a letter carrying service first and foremost, not parcel, not "legal documents" or whatever else. Letter volume has decreased substantially in the last 5 years, and I'm guessing that the 99M in profits they saw will drop along with it in the years to come. As far as "service first" ideas go, this conflicts with things like delivery time allowances and community boxes that make the job of carriers easier while hurting the client's experience. This isn't really up for debate.

  4. FedEx and other courier services are actually cheaper or on par with Canada Post as far as pricing goes, and offer a superior service. If you need to see evidence of this, lose a tracking number, and see if Canada Post can help you find your parcel - you won't be thrilled with the results. FedEx/UPS on the other hand has the ability to find your parcel even absent a tracking number. Further, these couriers offer speedier options, cheaper insurance on parcels, and delivery at their base level service much quicker than CP does.

  5. Suggesting Canada Post should be profit neutral is insane, and it demonstrates a misunderstanding of the mandate crown corps have. The country should be looking to make money wherever possible. Imagine the LCBO ran as profit neutral, what a shame it would be that a service with such potential for profit AND a high service standard (which it meets or exceeds in nearly every encounter, in my experience) only operated at net zero. If both options aren't available to Canada Post, then the service needs an overhaul to help the bottom line. That overhaul isn't spending all it's profit on raises for staff, new employees with shrinking work loads, etc. That's not how business works.

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By KevinLove (registered) | Posted July 08, 2016 at 09:37:03 in reply to Comment 119705

You guys are acting like this casual->indeterminate thing is uncommon. It's literally the case in every single public service job.

False statement. Try enlisting in the Canadian Forces. That's not casual.

Suggesting Canada Post should be profit neutral is insane, and it demonstrates a misunderstanding of the mandate crown corps have.

It took about 10 seconds with Google to turn up the actual mandate of Canada Post, as contained in the Canada Post Corporation Act. From 5 (2)(b)

...the Corporation, in carrying out its objects, shall have regard to... the need to conduct its operations on a self-sustaining financial basis while providing a standard of service that will meet the needs of the people of Canada and that is similar with respect to communities of the same size;

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By The99Percent (registered) | Posted July 11, 2016 at 07:41:46 in reply to Comment 119707

If this is the best set of counterpoints you can come up with, I feel pretty good about my side of the story. The Canadian forces thing is laughable - of course this country will not force you to endure a term of employment where job security is not guaranteed if (in exchange) you are willing to train and potentially fight to defend this country. Much the same as other, less in-demand work in private and public sectors, graduated employment terms are not required. Of course, though, you know this already, and are only nitpicking.

As for the mandate, I knew when I wrote that word that one of you would google the mandate-proper. I wrote that it is the mandate of CROWN CORPS, not of Canada Post specifically - like other businesses, the bottom line is the most important thing - and CP knows this. Look no further than the community mailboxes - they know that they're bottom line is hurting, and judging by your arguments, so do you.

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By KevinLove (registered) | Posted July 11, 2016 at 10:26:42 in reply to Comment 119713

I wrote that it is the mandate of CROWN CORPS, not of Canada Post specifically

Actually, it looks like you referred to Canada Post specifically when you wrote:

Suggesting Canada Post should be profit neutral is insane

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By ergopepsi (registered) | Posted July 11, 2016 at 09:45:19 in reply to Comment 119713

They're / Their. I hate how spelling mistakes ruin perfectly valid arguments.

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By moylek (registered) - website | Posted July 10, 2016 at 09:10:51

The job is hard. Like, really hard.

Does that not explain at least some of the 30% wage difference between rural and urban letter carriers? I should think that urban carriers should make quite a bit more money, given the physical exertion and attendant stresses.

I'd love to know what you wife thinks about the pay difference, Ryan.

Comment edited by moylek on 2016-07-10 09:11:47

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By KevinLove (registered) | Posted July 11, 2016 at 10:23:31 in reply to Comment 119711

The pay difference was originally justified by the higher cost of living in urban areas. Urban employees were given extra pay to compensate them for the higher cost of living in urban areas.

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By moylek (registered) - website | Posted July 11, 2016 at 18:44:53 in reply to Comment 119716

Urban employees were given extra pay to compensate them for the higher cost of living in urban areas.

Interesting. I'd still be interested to hear - directly or indirectly - from a letter carrier as to whether wage parity seems fair.

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By Addweight (registered) | Posted July 15, 2016 at 12:18:22

I am a letter carrier and can say that in my opinion, and several other people who I have spoken with, that wage parity is great, awesome in fact. But really the RSMCs should have their own union as it is essentially a completely different job. I mean, if the teachers go on strike then I may be on their side but I'm not going to picket on their behalf. I have to correct something in the article too;

CUPW presented the offer to its members for a vote, and over 90 percent voted to reject it.

Absolutely untrue, a strike vote was held Before any offer and that is the 90% figure, the offer was turned down at the negotiation table, so the plebs like myself couldn't vote on it.

Comment edited by Addweight on 2016-07-15 12:18:37

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