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OTTAWA — A consequential report on Canada Post largely backs the Crown corporation’s story about its flagging business, experts say, and bodes poorly for the union attempting to negotiate a better deal for the postal service’s workers.
“If I was the union, I’m going to be very, very disappointed in this,” said Marvin Ryder, associate professor of marketing and entrepreneurship at the DeGroote School of Business.
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The Industrial Inquiry Commission report lands with less than a week left for the Crown corporation and the Canadian Union of Postal Workers to reach a new collective bargaining deal — a deadline that could see mail deliveries halted again as early as May 22 after a short reprieve from the holiday season strike.
The 162-page report made public Friday also recommends foundational changes for Canada Post, including phasing out daily door-to-door letter mail delivery for individual addresses while maintaining daily service for businesses.
It says the moratoriums on rural post office closures and community mailbox conversions should be lifted as well.
“My recommendations are based on my conclusion that there is a way to preserve Canada Post as a vital national institution,” commissioner William Kaplan wrote in the report.
“I have designed them to respond to the present problem: to arrest and then reverse the growing financial losses by putting into place the necessary structural changes both within and outside the collective agreements.”
The report was called for after Ottawa asked the federal labour board to send postal employees back to work last year to end a strike that was disrupting holiday mail deliveries.
The report examined the state of Canada Post and its finances, in relation to reaching a labour deal.
Report says bargaining deal failed because of union
Kaplan said that both sides were “diametrically opposed,” leading to stalemates at the bargaining table, but he put the onus for failing to reach a deal on one side in particular.
“Bargaining largely failed because one party — CUPW — is defending business as usual,” the report said, arguing the union is pushing for improvements on the “status quo.”
“In essence, his report is saying, ‘Hey union, you’ve got to change your tune,'” Ryder said.
“Now, will they? I don’t know, and so I would like to think this report is going to trigger some intense negotiations over the next few days.”
Kaplan wrote that Canada Post is facing an existential crisis and is effectively insolvent.
“Without thoughtful, measured, staged, but immediate changes, its fiscal situation will continue to deteriorate,” he wrote.
Canada Post CEO Doug Ettinger said in a statement Friday that Kaplan’s report offers the Crown corporation, its employees and the Canadian Union of Postal Workers “a frank and straightforward assessment” of the challenges facing the postal service.
He welcomed the report’s recommendations and said they come at a “critical time” as Canada looks to strengthen its economy to guard against U.S. threats.
Business model ‘no longer works’
Kaplan said that until recently, Canada Post was able to operate in a financially sustainable manner as low-cost urban and suburban mail delivery subsidized high-cost delivery to rural, remote, and Indigenous communities.
“This model no longer works because the traditional core business — mail delivery — has fundamentally changed: fewer letters must now be delivered to more addresses,” he wrote.
Stephanie Ross, associate professor in the school of labour studies at McMaster University, agreed with Ryder that “on balance, (Kaplan) sides with the employer” in the report.
Among its other recommendations, the report says Canada Post must have the flexibility to hire part-time employees to deliver parcels on the weekend and to assist with volume during the week.
It also says Canada Post must also be able to change routes daily to reflect volumes.
Throughout negotiations, CUPW has pushed back on proposals that would see Canada Post take on part-time workers to fill shifts, arguing those moves could compromise job security for full-time employees.
Kaplan did state that any part-time work “should not be gigified jobs, but good jobs, attractive jobs,” that fall under the umbrella of terms in the collective agreement.
Ross said that recommendation was a silver lining for CUPW, but it will nonetheless be a difficult pill for the union to swallow if full-time workers are displaced and forced to instead take on involuntary part-time work.
“I’m left with a set of recommendations that are, I think, very bracing,” she said.
“And I don’t know what’s really in it here for the union except the sense that, if they don’t agree to these measures, they may not have jobs in the long run.”
The reprieve provided by the federal labour board expires on May 22, at which point a labour disruption could resume. Ryder noted that process is not automatic, and the union will have some leeway on when or if it wants to trigger a strike.
Ross said she does not, at first read, think the report moves the negotiations toward a resolution.
While the report makes the case that CUPW might need to make concessions, she said what’s still missing is an upside for workers if they were to abandon some of their sticking points.
“There’s no reason to think there won’t be a restarting … of the labour disruption,” Ross said.
CUPW said it “fundamentally” disagrees with most of the report’s recommendations and it challenges “some of the information on which it was based.”
“We have also objected to the entire process, but we felt that we had to participate in order to give voice to postal workers,” the union said in a statement.
It added that the recommendations “amount to service cuts, contracting out and major rollbacks to important provisions in our existing collective agreements.”
The union met with Patty Hajdu, the newly sworn-in minister of jobs and families, and John Zerucelli, the secretary of state for labour, on Friday to discuss the report and negotiations.
“Minister Hajdu sought to assure us that Canada Post was committed to the bargaining process and will present us with offers soon,” the union said.
Hajdu said in a statement posted to social media Friday afternoon that the report “offers thoughtful suggestions on how to continue good-faith negotiations.”
“It’s time for everyone to put aside their differences, focus on shared goals, and ensure a strong postal system now and into the future,” she said in a post on X.
Earlier in the week, Canada Post had hit “pause” on negotiations with the union.
The corporation said at the time it was regrouping after several days of unproductive talks to come up with proposals for the union that reflect the postal service’s financial reality.
CUPW dismissed this as a “tactic” and accused the employer of refusing to negotiate with “real intent.”
On Friday, Ettinger said Canada Post “will work with our bargaining agents and our shareholder, the Government of Canada, to address our challenges and secure a sustainable path forward.”
— by Craig Lord
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