Looming Canada Post strike creating anxiety for Calgary small businesses

Delivery vehicles are seen at Canada Post's main plant in Calgary, Alta., Saturday, May 9, 2020. (THE CANADIAN PRESS/Jeff McIntosh)

The looming threat of a Canada Post strike is creating anxiety for some Calgary small business owners as any sort of slowdown in their shipments could mean thousands of dollars in lost revenue.

Joyce Okunusi, the owner of Joyce’s Closet Boutique, opened up her first brick-and-mortar store in Calgary’s Kensington neighbourhood just over a month ago, but says online sales make up a large chunk of her business.

“It would be very detrimental to my business if Canada Post went on strike because this is the busiest season for shipping,” Okunusi said.

“We would lose tens of thousands and dollars if that happened to us. We send about 25 packages out on a slow week and going into the Christmas season it doubles or triples.”

The Canadian Federation of Independent Business notes that many Alberta businesses significantly rely on the Crown corporation to send their products and to receive invoices along with payments from customers.

“This could have a profoundly negative impact,” said Bradlee Whidden, CFIB Policy Analyst for Western Canada.

“For reference, the last time Canada Post went on strike in 2018, we had 61 per cent of Canadian small businesses negatively impacted with an average cost of around $3,000, so many simply can't afford that impact right now.”

In addition to negative implications for small businesses, the City of Calgary is also preparing its own contingency plan.

CTV News has learned that if a strike were to occur, the city would be releasing additional details on Monday to address potential disruptions to city services.

The city notes that plans are in the works to use a courier service to ensure continuity for customer service and business operations.

American citizens who live in Canada could also be impacted ahead of next week’s U.S. presidential election.

Bruce Heyman, former U.S. Ambassador to Canada, is encouraging those who have not sent in their mail-in ballot to consider using a private courier service such as FedEx, DHL, or UPS.

Canada Post presents latest offer to union

Canada Post presented its latest contract offer Tuesday to the Canadian Union of Postal Workers (CUPW) in a bid to reach a new deal without a labour disruption.

The new proposal includes annual wage increases amounting to 11.5 per cent over four years. It also protects the defined benefit pension for current employees, as well as their job security and health benefits.

The union announced late last week that its members voted overwhelmingly to support a strike if a deal could not be reached at the bargaining table.

It said preliminary results showed 95.8 per cent of urban workers and 95.5 per cent of rural workers voted to back the strike mandate.

A cooling-off period in the contract talks ends on Saturday. Workers would be in a legal position to strike as of 12:01 a.m. ET on Nov. 3, if notice is given 72 hours in advance.

“The employer has provided us with a global offer that does not address the issues and concerns of our members,” said Wycliffe Oduor, president of CUPW Local 710 in Calgary.

Oduor represents more than 2,500 Calgary postal workers who are calling for better safety protocols, proper staffing rotations to prevent burnout, improvements to benefit packages and higher wages.

“Just to address inflation we’re looking at a 12.65 per cent increase in the first year which is based on inflation over the years and then after that, a 4.5 per cent wage increase in the second year,” he said.

“The cost of living especially if you live in Calgary is difficult and when you’re looking at housing, when you’re looking at bills that we pay today, they’ve gone up two or three times above normal.”

Canada Post declined to comment further as negotiations with the union are ongoing.

An 'unsustainable' financial situation: Canada Post

Canada Post and CUPW have been negotiating and meeting regularly for almost a year.

The Crown corporation reported in May that it suffered a $748-million loss before tax in 2023, citing competition from a post-pandemic surge in parcel delivery services, lower volumes of transaction mail and higher delivery costs.

At the time, it warned that it could run out of operating funds in less than a year.

“Canada Post’s financial situation is unsustainable,” read the latest quarterly report.

“The corporation has recorded significant annual losses since 2018, fuelled by rapid changes in the postal and parcel delivery sectors and legacy regulatory measures that impede the company’s ability to evolve and compete.”

Ian Lee, an associate professor with the Sprott School of Business at Carleton University, wrote an 850-page thesis on the origins and evolution of Canada Post.

With financial pressures mounting, he says the crown corporation is effectively on “life support.”

“Canada Post has lost money for seven years in a row and Canada Post CEO was on the record at the annual report conference, saying that they're going to run out of money in 2025,” Lee said.

“They’re going to have to be bailed out by the taxpayers of Canada. Canada Post is essentially insolvent, and with this next government, whoever it is, will be facing one of the largest downsizing in Canadian history, that will probably rival the Liberal Chretien government downsizing of the public service in 1995.”

Lee adds that with the advent of digital e-commerce and shipping services such as Amazon are making Canada Post uncompetitive.

“FedEx or DHL costs about $45 per hour for the truck, driver and fuel, Amazon we estimate is around $25 per hour, but Canada Post is $65 per hour,” he said.

“Anybody who understands basic arithmetic can understand why they've lost 50 per cent of their market share to e-commerce companies. The underlying driver of digitization is ongoing, and it's going to accelerate all this.”

With files from The Canadian Press