At federal inquiry, Canada Post blames workers leaving early and union points to mismanagement
With both sides entrenched in their positions, Canada Post management is blaming its problems on delivery staff leaving early. At the same time, its union says the Crown corporation’s problems stem from its own financial management.
Canada Post bosses and the Canadian Union of Postal Workers (CUPW) squared off in a downtown Ottawa hotel on Monday, the first day of hearings at the industrial inquiry commission convened by the labour minister.
The commission is supposed to examine Canada Post’s financial situation, business model and workplace practices and produce a report in May.
Canada Post and CUPW are no closer to resolving a workplace dispute that led to a four-week strike during the busy holiday season. On Jan. 17, the union said negotiations had broken down once again.
Canada Post at ‘critical juncture’
CUPW argued Monday about mismanagement within the corporation and postal bosses who want to weaken the union’s power.
For its part, Canada Post’s corporate bosses complained about an inflexible staff and regulatory framework preventing it from transitioning from a five-day letter carrier service to an everyday parcel delivery service.
“We’re at a critical juncture with Canada Post right now,” said CEO Doug Ettinger. “We need to redevelop our operating model. It’s an old-fashioned, outdated operating model that in today’s hyper-competitive e-commerce market holds us back.”
The hearings began with Canada Post’s senior leadership laying out the dire financial situation and staffing structure that prevents it from pivoting.
Rindala El-Hage, Canada Post’s chief financial officer, outlined a bleak economic outlook. She projected a financial loss in 2025 of $900 million, which will rise to almost $1.7 billion in 2029. El-Hage stressed that’s over $6.9 billion cumulatively lost over five years.
She said the corporation is also burning through cash, and was expected to deplete its reserves sometime this year if it had not received an injection of more than $1 billion from the federal government.
Staffing problems
Canada Post vice-president Alexandre Brisson explained that the collective agreement prevents the corporation from reassigning letter carriers who finish their mail runs before their eight-hour shift is over.
The inquiry’s commissioner, University of Ottawa law professor William Kaplan, called that lack of flexibility “puzzling.”
“How is it not a problem when somebody is paid for eight hours of work, and there’s more work that could be done, and the corporation could avoid paying overtime to someone else by having that person work for the eight hours for which they are paid?” Kaplan asked the union.
The union explained that in 2003, Canada Post removed the requirement for letter carriers to take their lunch at the office in a bid to reduce overtime. It instead allowed carriers to work through their lunch and leave early.
CUPW grievance officer Jim Gallant said workers under the current model are incentivized to work faster.
“When people are scheduled for eight hours, they work eight hours. And when you give them a carrot to say you can go home early, people run,” Gallant said, adding that changing this rule wouldn’t necessarily make workers more flexible.
Union blames financial mismanagement
During the union’s submission, CUPW President Jan Simpson called the commission a “skewed” process favouring Canada Post. She said the Crown corporation has more resources, and tightly controls its financial information.
“Despite our misgivings about this process, CUPW values any opportunity to discuss the public post office and the contributions of our members,” Simpson said.
The union also accused Canada Post’s senior leadership of financial mismanagement.
Mailing a letter with Canada Post will now cost $1.44 per stamp, and everything else will cost more too. It’s part of a price hike on all mail products that the Crown corporation says will help with rising operation costs.
“Our experience over the last decade and a half has taught us to be skeptical of Canada Post’s financial reporting,” Simpson said, pointing to “inaccurate” past projections that Simpson says the corporation is using to “justify service cuts and demand concessions on the union bargaining.”
She said Canada Post also elected to keep letter postage rates “exceptionally low” over the years compared to other postal services internationally while allowing a “significant rise” in non-capital costs, administration expenses and the purchase of mail-processing equipment and fleet vehicles that often sit idle.
“Rather than addressing these critical issues and seeking solutions in a timely manner, Canada Post waited until the bargaining cycle to have a manufactured crisis,” Simpson said.
“Canada Post is trying to use its financial struggles as a pretext to implement drastic service cutbacks and gut hard-fought for and long-standing collective agreements.”
The union has said it issued separate demands for its urban mail carriers and its rural and suburban mail carriers, but made the following combined demands for both groups:
- Wage increases of nine per cent, four per cent, three per cent and three per cent over four years.
- A cost-of-living allowance.
- Ten medical days in addition to seven days of personal leave.
- An increase in short-term disability payments to 80 per cent of regular wages.
- Improved rights for temporary workers and on-call relief employees.
Simpson said Canada Post has been pushing for a rewrite of the corporation’s collective agreement, two-tier pension systems, increased monitoring of workers, reduced leave and other benefits and lowering overtime and starting wages.
