Businesses turn to other shipping services as Canada Post warns of delays from union's overtime ban

Globe and Mail

23-05-2025

Canadians might wait longer to receive mail, packages and some cheques after the union that represents 55,000 Canada Post employees called on its members Thursday night to refuse overtime work.
While postal operations will continue, the mail courier said in a statement that customers may experience delays. This comes after the union failed to reach a deal with the Crown corporation ahead of a midnight strike deadline on Friday.
'On the positive side, mail will still be moving, and while things may be delayed, they will get there,' said Dan Kelly, president of the Canadian Federation of Independent Business.
Money for payroll won't be frozen in the mail, which is one of the biggest things that small businesses and their employees rely on Canada Post for, he said.
But the lingering threat of a strike continues to create uncertainty for businesses. 'None of the long-term issues get resolved, and we still have the threat of a strike really at any point in time,' Mr. Kelly said.
While some businesses are better prepared for the disruption after a previous 32-day walkout by postal workers last winter, it still introduces added costs – as much as 10 to 15 per cent for some users – that companies need to absorb or pass on to consumers.
Many have pivoted to private couriers since the last disruption or lined up backups.
Canadian shipping company Chit Chats, for example, saw a 300-per-cent increase in sign-ups and new shippers during the last Canada Post strike, said spokesperson Juhee Cha in an e-mail.
But Mr. Kelly said turning to alternative couriers often means paying surge pricing the private companies impose in response to higher demand.
'You either eat the cost yourself or your business may be losing money on that sale,' he said. 'Consumers are already extra price-sensitive, given the uncertainty in the economy over U.S. tariffs.'
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John Barrett, the director of sales, marketing and development at Veseys Seeds Ltd., which calls itself Canada's largest mail-order gardening company, said devastating losses during the last postal strike pushed the company to move shipments to a competing firm.
The firm lost roughly 6,000 to 7,000 orders last winter, translating into 'hundreds of thousands of dollars' worth of business,' said Mr. Barrett.
The move to a new shipping company meant paying 10 to 15 per cent more 'at bare minimum,' he said, 'and in some cases more than that.'
Still, many companies describe the shift to alternative shipment companies as a wise business move.
Maria Morales, senior director and general manager at Poshmark Canada, said the fashion resale marketplace launched a partnership with Purolator in April, providing sellers who relied on Canada Post an alternative in case of disruptions. She said that over 75 per cent of Canadians live within three kilometres of a Purolator drop-off location, offering added convenience to consumers.
But Mr. Kelly said the added pressure on private couriers could put strain on their capacity as well, which occurred during the last postal strike.
In December, Purolator and UPS temporarily paused shipments from some other couriers as they worked through extra deliveries resulting from the Canada Post strike.
The national postal service is also involved in the last leg of delivery in many remote communities.
'The private courier may get it as far as Whitehorse, but then to get into other locations in Yukon, Canada Post may be used,' said Mr. Kelly. 'If they're knocked out, customers become inaccessible.'
For small businesses, any potential strike is set to compound sales challenges already brought on by U.S. tariffs, he said. Many companies also still rely on physical cheques for payroll, raising additional cash flow risks.
Mr. Kelly criticized the union as well as political leaders for their inaction.
'The union seems to have a death wish – it seems to be doing everything possible to create as much economic damage to Canada Post and alienate as many customers as possible,' he said.
In a statement, CUPW said that it opted to proceed with an overtime ban at this time to 'minimize disruptions to the public and lost days for members.'
Geoff White, executive director of the Public Interest Advocacy Centre, which represents Canadian consumers, said Canada Post has an exclusive privilege over mail delivery and remains an essential service. 'So, its work force should not be allowed to – on a regular basis – use that exclusivity essentiality as a bargaining chip,' he said.
The disruption comes at a pivotal moment for the Crown corporation, which has accumulated more than $3-billion in losses before tax since 2018. An industrial inquiry commission report recently found that Canada Post was 'effectively insolvent, or bankrupt.'
The contract presented by the Crown corporation to its union on Wednesday included wage increases that amount to 13.59 per cent over four years, up from the previous offer of 11.5 per cent. It also added six paid personal days.
Weekend delivery remained a sticking point – Canada Post and CUPW disagree on how to staff weekend operations.
'Canadians generally respect the importance of labour rights,' said Mr. White. 'But there is not a lot of sympathy in the case of Canada Post, which has had years to adapt.'