By Paul Vieira
OTTAWA--Canada's labor minister proposed a solution to end a month-long strike at the government-owned postal service, saying mediators informed him negotiations between Canada Post and the main union are headed in the "wrong direction."
Steven MacKinnon said Friday he has asked the federal labor-relations board to rule on whether it agrees with his view that the postal service and the Canadian Union of Postal Workers are at an impasse.
The Canada Industrial Relations Board has about 72 hours to deliberate, and should the board agree, MacKinnon said, he hopes mail delivery could start as early as next week. At that point, he would extend the current labor agreement to May 22, while an appointed arbitrator works to bring the two sides closer to a deal.
"We are calling a timeout," MacKinnon told reporters at a press conference in Ottawa. "The positions have hardened. We are at a total impasse."
In a statement, the union, which represents 55,000 employees at Canada Post, said it "denounces in the strongest terms this assault on our constitutionally protected right to collectively bargain and to strike."
Canada Post said it remains committed to striking a deal with union negotiators that addresses Canadians' changing needs while providing good-paying jobs.
The labor dispute is in its 28th day and is the latest hit to the country's supply-chain network. In two other labor disputes, a simultaneous lockout at the country's two main freight-rail carriers, and the shutdown of seaports in Montreal, Quebec City and on the British Columbia coast, the Canadian government intervened and the labor board agreed to impose binding arbitration. This time, MacKinnon is opting for a different course, effectively putting a pause on the strike in the hopes a deal can be hammered out by mid-spring.
The strike began on Nov. 15, and the Canadian Federation of Independent Business said the labor dispute has cost its members, small- and mid-sized firms, an estimated 1.6 billion Canadian dollars, or the equivalent of $1.2 billion, in sales, at the height of the holiday shopping season.
"This will be too late to salvage any of the Christmas holiday season for small businesses," said Dan Kelly, president of the federation, a lobby group. "Millions of dollars have been frozen in the mail making it difficult for small firms to pay their bills."
Kelly cited the example of western Canada factory owner, who has been unable to fully pay his employees because he is waiting for payments, via the mail, from U.S. customers.
Kelly added small- and mid-size firms have indicated to him they will realign their operations to rely less on Canada Post.
According to an update this week from Canada Post, union negotiators want a 19% pay increase over a four-year period, whereas the postal service offered 11.5% over the same time period.
"The union's proposal remains well beyond what the corporation can afford, given its significant losses and deteriorating financial position," the postal service said. The two sides are also divided regarding time-off provisions, staffing numbers and changes to the delivery network.
Canada Post, like other government-owned mail carriers, has struggled financially as households and businesses use alternative methods, like email, to deliver information and services to customers. At its peak in 2006, Canada Post handled 5.5 billion letters annually. In 2023 its employees handled 2.2 billion letters. The government-owned agency said it has lost more than C$3 billion since 2018, and its cash reserves have eroded to maintain its service obligations.
In the third quarter, Canada Post recorded a C$210 million net loss, wider than C$163 million loss reported in the same year-ago period. Canada Post said in September that it would raise the price of a stamp by 25%, effective in January.
"Canada Post must be self sustaining," MacKinnon told reporters.
Write to Paul Vieira at paul.vieira@wsj.com
(END) Dow Jones Newswires
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