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Canada Post on Strike

Canada Post on Strike

June 20th, 2011  · stk

Did you know Canada Post is on strike? The Canadian postal system shut down over a week ago. The United States is no longer accepting mail addressed to Canada. Who cares? In the age of text messages, email & a myriad of private parcel delivery companies to choose from - is Canada Post even relevant?

Canada Post is on Strike? Who Cares?

 Canada Post Strike 2011 - Mailbox closed

My seven (and a half) year-old daughter recently participated in day-long "Hands-Across the Border" event, where girl scouts (Brownies) from Canada and the United States traded goodies and celebrated at the near-by Peace Arch border crossing. Alex had obtained some nice "City of Nanaimo" and "Canada Flag" trader-pins from our MLA, Leonard Krog, when Rachel visited his office a couple of weeks ago.

"What's this got to do with the Canada Postal Union strike?" you might ask.

Well, Alex wrote a very nice, colorful, personal letter of "thanks" to MLA Leonard Krog and we took it down to the post box this morning to mail it. We couldn't put it into the outgoing mail slot, as it had been covered over with the Canada Post "closed" sign shown above.

"Oh, right," I told Alex, "Canada Post is on strike, so there's no mail delivery."

Sadly, MLA Leonard Krog will have an easier time finding his mail here, than he will finding it in his mailbox (an e-mail from his website will let him know that he can read his "Canada Post mail" here!)

This incident made me curious about the Canada Post strike. I know the Postal Union members have been on strike for a while and that mail delivery stopped over a week ago. But ... why are they on strike? If the strike doesn't affect me much, how many others don't care? How relevant is Canada Post in today's world of electronic mail, Skype, cell phone text-messaging, FaceBook, Twitter and private parcel services (e.g., UPS, Fed-Ex & DHL)?

Canada Post Strike 2011 - What it's About

The hypocrite in me thought that the postal strike was about the Union wanting more money. The hypocrite in me was - in general - correct. In a Globe and Mail article the author says the Canadian Union of Postal Workers wants a wage hike and management (the Crown corporation, which means "government-run") says it must slash labour costs, citing stats that letter mail has fallen 17% since 2006.

Despite the need to cut costs, Canada Post management has - as a concession - offered a two-tier system, according to a MarketWatch article by Bill Mann. Current employees would get top wage rates of $26/hour, job security, no reduction in their defined-benefit pension plan, medical benefits & a generous vacation leave - up to 7 weeks per year. New hires would start at a lower rate - $19/hour (way above minimum wage), rising to the same maximum, up to 6 weeks vacation & a defined benefit pension by age 60.

"Not good enough," says the Canadian Union of Postal Workers.

 

The Canadian Union of Postal Workers - Nailing Their Own Coffin

The Union is out of touch with reality and - ultimately - their members may end up paying dearly for it.

Firstly, there's the economy as a whole. The Canadian (and other) governments are facing an era of austerity. In the face of all of this belt-tightening, the CUPW demands don't make a whole lot of sense, especially considering the decline in postal services & letter-mail volume.

Secondly, while postal strikes have been successful in the past (yes, Canada has had many over the years: 1968, 1974, 1975, 1978, 1981 and 1997 was the last) times have changed. And not just a little - they've changed A LOT!

Since 1997, the world has gotten online. Broadband Internet has penetrated the majority of Canadian households (over 80%, according to Statistics Canada - 2009 data). Internet means electronic mail replacing snail mail, electronic billing replacing mailed bills, cash transfers instead of written cheques and the proliferation of private parcel delivery services to meet the demand of online shopping.

The 1997 postal strike was bound to be far more crippling than the one this year. Heck, I get mail so infrequently that I probably open our community mailbox less than once a month.

From a personal point of view, I find Canada Post an irrelevant, antediluvian and bureaucratic service. No mail delivery on Saturdays. Mail delivered to a community box and not a personal mailbox. Frequent break-ins and theft of mail from our community boxes. High cost to mail letters to the United States. Cheaper postal rates for packages headed to Florida than to the Maritime Provinces. Oversize packages not dropped off on our stoop, in favor of a postal outlet 8 kilometers away. Requirement to show ID to pick up packages at that postal outlet. Mail returned for minor addressing "infractions". The list goes on.

"And the Postal Union wants WHAT?" I ask.

This in the face of cut-backs, declining services, declining mail numbers and a huge ($3 Billion) pension obligation? The Postal Union's strike is unpopular and out of touch with reality. They may just be pounding nails into an already closing coffin. The strike will simply motivate more people to sign up for electronic payments, e-statements, online billing options, email and use more private parcel services.

The Postal Union is simply driving away the very customers they're going to need, moving forward. Short-term gains for Union members? Perhaps. Losing sight of the big picture? Definitely.

Bottom line - If Canada Post Union members are paid more than - and have better benefits (i.e., bankable sick time, generous pensions, more vacation time & extended health) than - employees working at competing, private companies ... how can Canada Post compete?

UPDATE: 27-Sep-2011 - On the other side of the border, Mark Roberts, an economics professor at Penn State wonders, "Can the United States Postal Service Survive?"

Run as a "quasi-governmental agency", mandated to be "revenue-neutral", hampered by political-motivated financial obligations (pay $5.5 billion for future health benefits of 'career employees') and running yearly deficits ($9.2 billion in 2011) and faced with increased competition and declining first-class letter delivery demand ... the future doesn't look too bright.

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1.flag Danno Comment
06/21/11
Due to a horribly unusual situation, I've been unable to communicate with my girlfriend via email and had to resort to learning how to send mail and using Canada Post. Now they've gone on strike and I haven't received a letter from her when I should've gotten it last week, and I'm not really counting on getting it tomorrow, which is the last day before I go and visit her directly. My job puts lives at risk at around $15/h. They can't send letters between my girlfriend and I faster than the time it takes for me to book a flight and see her because they're too busy whining about how unfortunate they are? I hope their useless service does go under; postal mail is clearly obsolete in this day and age. The old-fashioned can just learn to do things online, the stubborn could probably just pick their mail up at some specific locations. The whiners can work at fast food, warehouses, and other low class jobs to learn about real danger, poor treatment of employees, and unsatisfactory pay.

Thanks for failing me the one time I needed you and while my life is on the line, Canada Post.
2.flag Jeff Comment
06/21/11
CanadaPost is very relevant if you ship packages. It is far cheaper to ship through CanadaPost than Purolator, Fedex, UPS, DHL or CanPar and it is far more convenient (unless you also work in an office that has a contract with one of these servies). I ship up to 75 packages a month through CP with high success rate (with a handful sent through CanPar due to size & weight). The strike and then lockout has crippled my online business. I shipped over $30,000 in merchandise in 2010 to 40 countries with zero damage claims
3.flag stk Comment
06/21/11
I feel you, Danno. I believe this strike will mark the demise of Canada Post, as it existed prior. Have a good trip!

Jeff - Make sure your 2011 stats include all the packages that Canada Post refuses to deliver! LOL. I'm curious to know, do you think CUPW should get the wage increases they're asking for, or do you think Canada Post has a point and postal worker wages should be reduced? (FWIW, it's not a good idea to have a business model that depends upon a government-run delivery service). For your sake, I hope the strike ends soon.
4.flag Julie Comment
06/21/11
the only vote the worker gets is whether or not to go on strike. they don't get a say on what the union accepts. I know that most workers felt that it was fair to accept the two tiered system simply because that was the only way the retiring people could get their pension, but the union was being pig-headed. The rotating strike wasn't a huge deal for most people, it was Canada Post who locked it's workers out that has completely shut-down the system. Irrelevant or not, these people have agreed to go back to work without rotating strike if the government could get C.P back to the table. Instead the government is punishing the workers and sending a message to all unions out there. "hey, screw your rights". The government is set to pass a bill that legislates a 1.75% wage increase over 3 years. This is set to go through any day now. In the meantime the last offer made by C.P. was 1.9% wage increase. If the union does not accept C.P. offer (if it is still on the table), or negotiate something else before the bill in passed, whatever negotiations go on afterward will have the government imposed wage increase. In my opinion the government has no business legislating wages, it could impose other things, like going back to work, or arbitration etc... but wages??? this was definitely a pre-planned union message by the Harper government. what about that 20 hr strike by Air Canada.... they negotiated at the last minute because the government was set to get them back to work. What kind of message does that give to workers?? You have no rights. I don't have any family members in union jobs, but I gotta say what the government is doing is nothing short of mafia. Think what you will of "snail mail", but there's more going on here than mail deliveries. we should all be outraged! @ Danno, I fail to understand your point. You don't use the mail service otherwise, so what? "and while my life is on the line", don't get that either. be mad at your email that was out of order then! shame on you for saying that mail is irrelevant but being peeved when it's not available for the novelty stuff. It's either relevant or it isn't!
5.flag Jeff Comment
06/21/11
stk - I can't remember ever having a non-deliverable package via CanadaPost. However, I have had 2 packages which went to Mississauga and came back to me as if I was the recipient instead of the sender. They both were supposed to go to the US.

As far as wages, my understanding is that it is reduced wages / pensions for new employees (which I agree with). I support grandfathering the wages of existing employees and let succession reduce the average wage.

It's only part of my business that relies on CP. I figure it's costing me about $100 daily, in lost sales.
6.flag stk Comment
06/21/11
Jeff - I meant all those package you can't send via Canada Post now, because of the strike. ;)

Julie - The only "vote" most employees have is to stay or quit. I'm all for making the workplace safer and keeping companies from running roughshod on employees (and Unions once had their place for doing this) but I believe that nowadays, Unions can wield too much power. Some can (and have) nearly run companies into the ground - losing jobs that Unions are supposed to protect.

I don't see postal work as being any more important than other work (teaching, selling shoes, etc.) I don't believe - just because there is a postal Union - I should have to pay extra, so that postal employees can have benefits that are better than say, teachers.

Add to this, my personal experience with the "service" I have received from Canada Post - and the fact that if Canada Post forever kept its doors closed, I could adjust to that - and you now realize that - for me - the strike is more annoying, than it is relevant.

7.flag Julie Comment
06/25/11
Are there not other options to send mail/packages? UPS/FED EX? it might cost more, but at least you won't loose you customer and I'm sure you can make some profit.
Listen, the Harper Government is trying to tell you it's economics, Canada Post has made a profit for the past 15 years. They made $280 million dollars profit (in 2009 I believe), I also believe they have not disclosed their profit for 2010-2011. So like all other corps out there squeezing, and trying to make even bigger profits, don't cry too hard for them. They are a cash cow for the federal government. this is supposed to be run as a public service first and foremost. and it's biggest asset (what makes them all that money) is it's workers. They have been locked out after imposing a rotating strike, they have also been stripped from all their benefits. The government, who is 100% shareholder of C.P. is legislating wages and imposing restrictions on the arbitrator favoring the Corporation. Imposing this Bill because it has a majority government. This is pure bullying.if they want to get the mail moving, TAKE THE LOCKS OFF THE DOORS. Let the workers deliver the mail. and let them go into arbitration without any restrictions. Let the arbitrator do his/her job. Stop interfering with collective bargaining. BTW without collective bargaining workers (unions and non-union) would not currently have maternity/parental leave, paid stats, sick days, company pension plans... just to name a few. the legal process, legal right to collective bargaining is there for a reason. We should encourage the government to respect that right. Most likely bill C-6 will pass, however, in the meantime the pressure is finally back on the government/C.P. to take the locks off the doors, and let the workers go back to work, and or for C.P. to go back to negotiating. Which, BTW, they walked away from the table once the Harper Government said they would pass a bill (no need to negotiate) with lower wages. and so, this is the bigger picture. It's not about CUPW, it's about so much more!
8.flag stk Comment
06/25/11
Julie - You know I don't like to disagree with you, especially not without a Crow 'n Gate beer, but ...

Canadian Govt. revenues for 2009 were $218B, of which $281MM was from Canada Post. Hmmm ... that's approximately 1/10th of 1%, not what I'd classify as a "cash cow"!

As a corporation, $281MM profit on $7.3B in sales only yields a profit margin of approximately 3.8% (not a company I'd likely invest in, if I could) ... (i.e., Canada Post is really all about 'serving the public', as it's not earning much money for the Canadian Govt., nor are its profits all that significant - except compared to the balance in my checking account! LOL).
9.flag Danno Comment
06/29/11
@Julie: The point is that many people today don't even know how to use the postal service - that's how unnecessary it is now. For the average person, Canada Post is not important and its workers don't deserve any special treatment.
My life was at danger since I couldn't properly plan my visit with my girlfriend. It involved going to the middle of nowhere in the USA with sunny +35 degree Celsius weather not even knowing if I'd be able to see her or not, if she perhaps had something she needed to tell me before my arrival. The situation was more to blame than anything else, but the point there is that Canada Post's hissyfit prevented them from even being a reliable backup form of communication. If I can't count on them as a last resort, why should I bother with them at all? Luckily, my trip turned out well, but no thanks to them. I'll be sure to keep all my billing and stuff online so I don't have to worry about their methods; they've lost my trust and have thusly become that much less necessary in today's society.

Yeah, it sucks that the government butted in, but how long do you want the postal service to be pissing around for? Whether we like it or not, there are some important things in the mail such as bills and my new driver's licence. We can't let Canada Post stay on strike for several months while their useless managers and worthless Union parasites casually argue with each other as thousands of workers loaf around outside the post offices with strike signs and profanity written on the sidewalk in chalk. If they hate getting good pay for average work, I'm sure they can count on their right to quit the job.