Canada Post workers set to wrap up voting on new tentative deal

Canada Post workers were set to wrap up voting on new tentative agreements Saturday after more than two years of labour strife.

Some 55,000 Canadian Union of Postal Workers members began voting April 20 on a five-year contract, which includes wage increases of 6.5 per cent and three per cent in the first two years. Voting was expected to conclude Saturday with the union saying it expects to release results on Monday.

Canada Post and the union have long sparred over wages and structural changes to the postal service, with workers having taken to the picket line on multiple occasions throughout the bargaining process. Both sides agreed not to engage in any strikes or lockouts while the ratification vote took place, though employees are also casting ballots on whether to authorize a strike mandate in case they reject the deal.

About 60 per cent of the union board endorsed the proposed collective agreement, saying it ensures job security, but the union’s president, Jan Simpson, asked members to reject it in March, arguing it rolls back rights and compensation.

Ian Lee, a professor at Carleton University’s Sprott School of Business, said a new agreement may stabilize the labour situation but it will also increase costs at a time when the postal service is bleeding cash.

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“Young people don’t write letters. Middle-aged people don’t write letters,” Lee said in an interview Saturday. “So this idea I hear all the time (that) we’re going to turn it around, as if somehow we’re going to give up our cellphones and go back to writing letters to our mothers and grandmothers and grandfathers and so forth. No, we are not. We’re deep into the digital economy and that is irreversible.”

The Crown corporation has recorded more than $5 billion in losses since 2018, faced with a significant reduction in letter mail and growing private sector competition for package delivery.

Earlier this month, the federal government approved up to $673 million to keep the mail service afloat for the current fiscal year after it reported a $1.57-billion loss before taxes for 2025.

On Friday, the Canada Post reported that it lost $205 million before taxes in the first quarter of the year.

“Their costs are going up year-by-year while their revenues are going down year-by-year. And this is not sustainable no matter who you are,” said Lee.

In the fall Ottawa announced a package of reforms for the postal service, including lifting a moratorium on community mailbox conversions, authorizing the mail carrier to convert the remaining four million addresses that still receive door-to-door delivery. It also announced an end to the moratorium on closing rural post offices that has been in place since 1994, covering close to 4,000 locations.

Lee predicts Canada Post’s deficit will continue to grow and Prime Minister Mark Carney’s federal government will balk at bailing out billions more in losses before the five-year labour deal expires, assuming the union ratifies the deal.

With labour costs and employee benefits making up about $5 billion of Canada Post’s $7.4-billion operating costs in 2025, Lee says the only way to get on stable footing is drastically reduce the number of employees. He says that will likely mean the end of letter mail service, which has happened in other countries, such as Denmark, which cut the service in December.

Without daily mail service, Lee says Canada Post could cut its employment from the current 55,000 positions to somewhere in the neighbourhood of 10,000 to 15,000. That kind of workforce reduction will require costly severance packages, he said, but needs to be done soon and won’t happen through attrition.

He says the slimmed down Canada Post would have to focus on parcel delivery, but that will be difficult to do against private sector competitors that haven’t had multiple high-profile work stoppages.

“They’ve got to survive on parcels, but they’re collapsing on parcels because business is abandoning them because they have the lack of reliability of the last several years,” said Lee.

The postal service’s 2025 annual report says parcel revenue fell 30 per cent from $2.8 billion in 2024 to $1.9 billion in 2025.