Could Canada’s Rural Post Office Service Come To And End?

Canada’s rural mail-delivery service is at a standstill.  After a full year of attempts at a new contract, 55,000 members of the Canadian Union of Postal Workers walked off the job.  The two sides are far apart and on their second arbitrator.

The union is calling for a wage hike of 24 percent over four years. In response, the crown corporation has offered an 11-and-a-half per cent increase. Other issues on the table include job security, benefits, and contract work for parcel delivery on the weekends.

“Well, we just want to keep up with what the cost of living is because we’ve only lost ground," said Bryan Shuck, spokesman for the Canadian Union Postal Workers.  "Since 2011, we’ve never gotten wages that even come close to inflation. We’re all willing to negotiate. We’re also willing to hold the line to get a fair deal.”

Canada Post management argues that it is under severe financial constraints. Canada Post has recorded losses of more than $3 billion in the past five years of operation, alone.

An associate professor at Carleton University in Ottawa has studied Canada Post’s operations for more than 20 years.  Professor Ian Lee says he submitted a report back in 2015 warning that Canada Post and its business model was in deep decline. Lee said that the report was dismissed as nonsense.  But he said his more recent report published in September was taken more seriously.  However, Lee said that attention came ten years too late for Canada Post in its current form.

“The tipping point has arrived. Postal volumes have just collapsed because of the digitization of everything," Lee noted.  "The CEO of Canada Post said, ‘Canada Post is going to run out of money sometime in 2025.’ They need to radically restructure, or they’re going to go out of business.”

In the past 20 years, Canada Post went from delivering five-and-a-half-billion letters a year to less than two billion today. And while rural residents rely far more heavily on Canada Post service, more than 80% of Canadians are urbanites who have made the move to digital.  Lee said that Canada Post needs to downsize its labor force drastically and needs to transform itself from a letter-carrier business model into a specialized package delivery service.

“They’ve got to restructure to become an e-commerce parcel-post partner of the e-commerce deliverers.  But it will be a much smaller post office. It won’t require 65,000 people.  As a parcel delivery, you only take it out to the house when there’s something to deliver, as opposed to the letter model, where you go out to every address every day of the week.  Those days are gone.”

Professor Lee predicted that the next government, regardless of who wins the next federal election, will impose drastic changes at Canada Post.

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