Canada Post has issued a 72-hour lockout notice to the Canadian Union of Postal Workers (CUPW), raising the spectre of a work stoppage by Friday.
The announcement came hours after Canada Post said its latest offer presented on June 25 was fair and reasonable, and that it still hoped to negotiate a deal with the union.
But in a statement early Tuesday, Canada Post says it plans to suspend the collective agreement as of Friday. It blamed prolonged negotiations, the union’s strike mandate and the financial cost of a rapid decline in mail volume.
The company adds the key sticking point in negotiations involves changes to employee pension plans. Canada Post wants to introduce a defined contribution pension plan for new workers, reports Benefits Canada.
The union notes the issue is pay equity for rural carriers, 70% of whom are women and earn 28% than their urban, mostly male, counterparts.
Read: What changes are coming to the CPP?
The Crown corporation says CUPW’s demands are “not affordable” and would add $1 billion in costs over the life of a new contract. The union accused Canada Post of preparing to lock workers out, and creating uncertainty by warning the public to avoid the post office.
“They have been lying to the public,” says CUPW president Mike Palecek. He adds Canada Post turned a $100-million profit last year and appears to be on track for bigger profits in 2016, although the Crown Corporation refuses to open its books to the union.
Canada Post has said that in the event of a full work disruption, it will not operate — mail and parcels will not be delivered, and no new items will be accepted.
Meanwhile, the CFIB is encouraging the postal service to find a solution to their growing pension problem, and urging a quick settlement before any mail disruption.
Read: Rethinking inflation-indexed pensions
CFIB issued a letter to Canada Post president and CEO Deepak Chopra last week, calling for a settlement, but stressed that unfunded liabilities in Canada Post’s pension plan are not a trivial issue, with a $6.2 billion solvency deficit. Pension costs must to be lowered to ensure plans are sustainable and don’t force rate hikes or service cuts on customers.
“While Canada Post must take steps to address its pension liabilities, the threat of a prolonged work stoppage has many small business owners worried,” says CFIB president Dan Kelly.
He adds, “Taxpayers and Canada Post customers can no longer afford to pay for gold-plated pensions that they themselves could only dream of. Rather than accepting the new, generous pension arrangement, it seems bizarre that the postal union would […] instead choose to disrupt their customers. We urge both parties to work quickly to reach a settlement.”