Why the Canada Post strike is so fu­tile

The Globe and Mail Metro (Ontario Edition) - - REPORT ON BUSINESS / OPINION & ANALYSIS - BAR­RIE McKENNA

Like so many other busi­nesses, the post of­fice is strug­gling to keep its head above wa­ter amid in­ten­si­fy­ing dig­i­tal dis­rup­tion

Prime Min­is­ter Justin Trudeau hinted this week he might soon or­der an end to ro­tat­ing strikes by 41,000 postal work­ers.

But would any­one no­tice if he didn’t?

That’s a ques­tion Canada Post Corp. and its strik­ing work­ers might want to pon­der.

The post of­fice is less es­sen­tial than ever in the age of e-com­merce, on­line bank­ing and in­stant mes­sag­ing. The Crown cor­po­ra­tion’s ever-shrink­ing monopoly mail busi­ness means most of what it does is read­ily avail­able from pri­vate-sec­tor ri­vals, giv­ing Cana­di­ans plenty of op­tions for de­liv­er­ing parcels and dis­tribut­ing ad­ver­tis­ing fly­ers. And a dwin­dling num­ber of us rely on let­ters.

Just look at Canada Post’s most re­cent quar­terly fi­nan­cial re­port. Nearly 60 per cent of the $1.6bil­lion in rev­enue the post of­fice gen­er­ated in the three months ended June 30 came from non­let­ter ac­tiv­i­ties, in­clud­ing di­rect mar­ket­ing and its fast-grow­ing par­cel busi­ness. Parcels gen­er­ated $607-mil­lion in rev­enue, up 20 per cent from the same pe­riod last year, and will soon sup­plant let­ters as the post of­fice’s main line of busi­ness.

The dra­matic shift away from tra­di­tional mail shows no signs of let­ting up. The vol­ume of let­ters de­liv­ered by the post of­fice peaked in 2006 and has de­clined more than 40 per cent in the years since. The trend con­tin­ued in the sec­ond quar­ter with let­ter vol­ume and rev­enue down 6 per cent from the same pe­riod in 2017.

Un­like 20 or 30 years ago, busi­nesses and in­di­vid­u­als have plenty of op­tions when Canada Post goes on strike. As The Globe and Mail re­ported re­cently, al­ter­na­tive ship­pers such as eShip­per, Ship Time Inc. and Chit Chats have seen a sharp in­crease in busi­ness since the ro­tat­ing strikes be­gan nearly three weeks ago. Al­ready, th­ese com­pa­nies are shift- ing pack­ages over to pri­vate car­ri­ers, in­clud­ing FedEx, United Par­cel Ser­vice, Can­par, DHL Ex­press and Puro­la­tor (which is owned by Canada Post).

In some cases, th­ese ser­vices may be pricier than Canada Post. But at least Cana­di­ans have choices, in­clud­ing one pro­vided by the postal ser­vice it­self.

For let­ters, Cana­di­ans have been shift­ing to al­ter­na­tives, which ex­plains the steady ero­sion of Canada Post’s tra­di­tional mail busi­ness.

In this en­vi­ron­ment, you wouldn’t ex­pect postal work­ers to have a whole lot of lever­age. And yet the list of de­mands is pretty long from the Cana­dian Union of Postal Work­ers (CUPW), which rep­re­sents more than 41,000 ur­ban, sub­ur­ban and ru­ral postal work­ers. It in­cludes a “sig­nif­i­cant” wage in­crease, a cost of liv­ing al­lowance, im­proved ben­e­fits, more sick days and a no-lay­off com­mit­ment for all reg­u­lar em­ploy­ees.

CUPW is well aware of the shift- ing na­ture of Canada Post’s busi­ness and it clearly wants to make the post of­fice more rel­e­vant by mak­ing it big­ger. So it’s also ask­ing for a vast ex­pan­sion of postal op­er­a­tions, in­clud­ing ex­tended hours, re­in­state­ment of door-todoor de­liv­ery to those shifted to com­mu­nity mail boxes in re­cent years and di­ver­si­fi­ca­tion into the bank­ing busi­ness.

Canada Post is ob­vi­ously look­ing at a very dif­fer­ent sort of fu­ture. It is of­fer­ing work­ers a 1.5per-cent a year pay hike, im­proved den­tal ben­e­fits and an ex­ten­sion of job se­cu­rity to more work­ers. Many ru­ral work­ers stand to win much larger pay in­creases as a re­sult of a re­cent rul­ing in a pay-eq­uity arbitration case.

The up­side is that the post of­fice is not seek­ing any ma­jor con­ces­sions.

Many of CUPW’s de­mands – most no­tably, the vast ex­pan­sion of ser­vices – are likely to be non­starters. Ear­lier this year, the fed­eral gov­ern­ment re­leased a dis- tinctly un­am­bi­tious “new vi­sion” for Canada Post, which in­cor­po­rated none of the union’s grandiose ideas. The gov­ern­ment is look­ing at us­ing the post of­fice’s re­tail net­work to de­liver some gov­ern­ment ser­vices in ru­ral areas, as well as ex­pand­ing its money or­der and dig­i­tal re­mit­tances ac­tiv­i­ties. It has no plans to re­store door-to-door mail ser­vice to house­holds that lost it.

The re­sult is a pretty wide gap be­tween what work­ers want and what Canada Post is of­fer­ing. No won­der CUPW mem­bers voted over­whelm­ingly to strike.

But work­ers should know one thing: Canada Post is not a growth com­pany. Like so many other busi­nesses, it’s strug­gling to stay rel­e­vant in the face of dig­i­tal dis­rup­tion. That is not an en­vi­ron­ment that lends it­self to big wage hikes, no-lay­off com­mit­ments and ex­pan­sion into risky new lines of busi­ness.

Postal work­ers will be lucky if Canada Post is still in busi­ness a decade from now.

The dra­matic shift away from tra­di­tional mail shows no signs of let­ting up. The vol­ume of let­ters de­liv­ered by the post of­fice peaked in 2006 and has de­clined more than 40 per cent in the years since.

JA­SON FRANSON/THE CANA­DIAN PRESS

Canada Post work­ers picket af­ter go­ing on strike in Ed­mon­ton on Oct. 22. Work­ers have made a se­ries of de­mands in­clud­ing a ‘sig­nif­i­cant’ wage in­crease – al­lowances the post of­fice can ill af­ford at a time when it has be­come less es­sen­tial than ever.

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