By Nick Fonda
Local Journalism Initiative
Last Friday, I walked to my mailbox only to find it empty. Later I heard on the radio that postal workers were on strike. Again.
In one way, this was not a surprise. The postal strike late last fall came to an end only through government legislation without actually resolving any of the issues—wages, benefits, and especially job security—that prompted the strike in the first place.
On the question of wages, workers were seeking a pay raise of 24 per cent over four years. Given the steep rise in the cost of almost everything, postal workers had good reason to ask for a substantial increase in salary. However, Canada Post, which offered a pay boost of 11 per cent over the same four years, was even more cash-strapped than its employees. Since before Covid, Canada Post has watched its annual deficit increase exponentially. Over the last seven years, it has received government bailouts amounting to almost four billion dollars, one billion of that coming in the form a loan last January. On average, Canada Post is losing $10 million every day.
How can you ask your boss for a raise when your boss is himself in debt?
A crown corporation since 1981 (one of about four dozen including Via Rail, the CBC, and the Business Development Bank), Canada Post is owned by the federal government but operates independently. Unlike private businesses and corporations which are profit-driven, Canada Post does not need to earn its shareholders—Canadian taxpayers—money, although for many years it did. Now, it just doesn’t want to keep losing quite so much money. It exists to provide a service that is of benefit to the country’s citizens, but that a private entrepreneur would judge insufficiently lucrative to undertake.
Postal service has existed in Canada since colonial times. (In the early 1800s, when Sherbrooke was still Hyatt’s Mills, Isaac Cutter’s stagecoaches delivered the Royal Mail the length of the lower St. Francis River valley.) As long as all long-distance communication relied exclusively on letter writing, the postal service thrived. Its first rival was the telegraph, but telegrams, for all their impressive speed, were expensive and necessarily very short. Except in emergencies, telegrams were rarely sent. Family and friends kept in touch by letter. At its inception, the telephone posed no more of a challenge to postal service than the telegraph, but that started to change in the decades following World War II. The telephone became a ubiquitous household item, and calling across the country or even overseas became easily affordable. A chat on the phone became a viable alternative to the handwritten letter. If technological innovation had stopped with the phone, Canada Post would still be doing just fine.
Unfortunately for Canada Post (and any Luddites among us), the telephone has given way to the smartphone and the personal computer. We communicate now by text message, by email, and by video conference calls. We pay our bills on line, so we no longer put our cheques in the mail. We might still send a few Christmas cards and an occasional birthday card, but we only rarely write and mail a letter anymore. Two decades ago, Canada Post was delivering five billion pieces of mail annually. Since then, that number has dropped by almost 70 per cent.
Designed four centuries ago (in 1635, King Charles I made the Royal Mail available to all citizens) to deliver letters, the Post Office finds itself with an ever-decreasing number of letters to deliver. Yet, every year, there are more households to which service has to be provided. By law, the Post Office is obliged to deliver the mail five days a week to even the most remote communities.
What has long been a difficult situation is steadily growing more difficult. Recently, Joël Lightbound, the minister responsible for Canada Post, described the crown corporation as being essentially insolvent and facing an existential crisis. He went on to say that Canada Post is worth saving, and that the government is open to making changes to ensure its survival.
The Industrial Inquiry Commission (IIC) is the most recent panel that examined Canada Post’s operations and submitted recommendations to render its services sustainable. (There have been at least six such studies since 2008.) The IIC was led by William Kaplan (arguably Canada’s best-known mediator) and received almost 1,000 submissions from individuals and organizations.
The Commission first noted that Canada Post is in serious financial trouble that cannot be solved by making small adjustments to its current operating procedure. It has to undertake major changes, including amending its charter obligation to provide daily household mail delivery. Similarly, the moratorium on the closure of rural post offices needs to be lifted. The Post Office has to be able to hire part-time employees as needed at peak times and to operate on weekends. Mail delivery deadlines which now range from two days for local mail to four days for cross-country mail should be changed to three and seven days respectively, allowing non-essential mail to be shipped on the ground rather than by air, which is far more costly.
At the present time, door-to-door mail delivery in Canada costs $279 per person annually. Eliminating home delivery and replacing it with community mail boxes would reduce that cost by almost half. It would also result in the cutting of many jobs. In itself, this would be a boon for Canada Post. In 2023, the crown corporation had an operating budget of $7.3 billion, two thirds of which was spent on salaries.
Last year, one third of Canada Post’s revenue came from letter delivery, but one half came from parcel delivery with the rest coming from the delivery of flyers and brochures. While Canada Post has a monopoly on delivering letters, there are a number of companies like FedEx and UPS that gladly deliver parcels for a fee. Canada Post wants to be able to better compete in parcel delivery, where it is losing market share.
While the government accepts the IIC findings and recommendations, the Canadian Union of Postal Workers (CUPW) is less than happy with them. Job cuts and part-time hirings run contrary to its goals. (Among other things, CUPW is proud of its role in making maternity leave a commonplace practice.) Postal workers, understandably, don’t want to pay the steep price that restructuring Canada Post is going to require. CUPW has made suggestions to redress the corporation’s exploding deficits, specifically to let Canada Post expand into banking, financial, and insurance services. It has also pointed out that executive pay is too high. (Canada Post’s chief executive officer, Doug Ettinger, earned $450,000 last year.) Unfortunately, even with best-case scenarios, these proposals would do little to address the corporation’s deficits.
The Canadian Encyclopedia traces postal strikes back to 1965, when workers staged a two-week wildcat strike that garnered considerable public support. Postal workers have gone on strike at least once in every decade since then, and job security has always figured as a key issue. This time round, it figures even more prominently. The Post Office employs about 50,000 people, most of whom earn a little more than $50,000 annually. Management suggests that many of the job cuts can be achieved through retirement, with more than 10,000 letter carriers within five years of retirement age.
Ultimately, as William Kaplan points out, Canada Post exists to provide a service to Canadians, and not for the benefit of postal workers. Public support for the mail strike is much more lukewarm than it was in 1965. Minister of Jobs and Family, Patty Hadju, recently asked both parties to reach a settlement, not ruling out quick government back-to-work legislation.
For many small businesses—including The Record—the current mail strike only hurts. It’s true that The Record puts out an on-line edition, so subscribers can still get their daily news fix. Nevertheless, for Luddites like me, The Record’s columnists and crosswords are best enjoyed on newsprint.