The Canada Post feud: Five things to know about their bottom line and the future of mail

Theglobeandmail.com
July 5, 2016
By The Canadian Press

Labour talks between Canada Post and the Canadian Union of Postal Workers have hit an impasse over the company’s pension plans. This morning, Canada Post gave 72 hours’ notice for a lockout, which might mean a shutdown of mail service by Friday. The union and Canada Post are at loggerheads over the best and most affordable way to overhaul their business as e-commerce drives more people to send packages, but fewer to send letters. Here are five things to know about the changing landscape Canada Post now faces, and what the two sides are saying about the way forward.

FIVE THINGS TO KNOW:

1. Revenue is up: Canada Post Corp.’s revenue from operations, which includes Canada Post, Purolator and SCI Group, totalled just over $8-billion in 2015, up from $7.98-billion in 2014, helped by the parcel business.

2. Overall volume is down: Canada Post delivered 8.9 billion parcels, letters and messages last year, down from over 9.1 billion in 2014.

3. Letters are losing ground to packages: Parcel volume grew by 9.7 per cent, or 16 million pieces, compared with 2014. Meanwhile, the volume of what Canada Post calls transaction mail fell by 6.1 per cent, or 239 million pieces last year. The union’s proposal includes a plan for an “urban unit” for parcel delivery seven days a week.

4. Canada Post still holds most market share: According to Canada Post, nearly two out of three parcels that Canadians order online are delivered by the post office.

5. Canada Post is trying to adapt: Last year Canada Post added Montreal as the third city where customers could receive same-day delivery of online orders from select sellers. The service was launched in the Greater Toronto area in 2013 and expanded to Vancouver in 2014.

THE BOTTOM LINE: WAGES AND PENSIONS

Canada Post: Their plan that would have new employees get a pension that operates like an RRSP, called defined contribution, instead of the defined benefit plan for current employees that guarantees a set level of retirement benefits.

The union: The union’s proposal is calling for larger wage hikes than what Canada Post is offering, and rejects the defined-contribution pension proposal.

Canada Post is changing, but these numbers prove it’s not shrinking.