The Canada Post strike has dispelled the myth that the old-fashioned Post Office has become as obsolete as rotary dial phones and fax machines, and the expression, “The cheque is in the mail.”
Of course, mail volumes have plummeted over the years. Households across the country were receiving an average of seven letters per week in 2006; today it’s two a week, Canada Post reports. The Crown corporation delivered nearly 5.5 billion letters in 2006; it delivered 2.2 billion letters last year. But its parcel volume had risen with the growth in e-commerce. In 2023, the post office handled 300 million parcels.
While few people rely on traditional postal services as they did in the past, the impact of the work stoppage by the Canadian Union of Postal Workers underscored the important role Canada Post plays in the lives of citizens and business owners.
Although electronic transactions are the norm, scores of government benefit recipients still get payments in the mail.
Many small businesses still rely on the postal system to deliver their products, send bills, receive payments and distribute promotional materials.
A strong majority – about 80 per cent — of small businesses rely on Canada Post services to do business, according to the Canadian Federation of Independent Business. Three quarters of small firms said they are negatively affected by a work stoppage.
Countless numbers of people operate “side hustles,” small home-based enterprises that need Canada Post to get their wares to their customers.
Small businesses have been hard hit by the service disruption as they have lost sales during the start of the holiday shopping season, a make or break time for many business owners. The CFIB cites an Ontario coffee wholesaler who estimates 90 per cent of sales are made at this time of the year.
The damage has been particularly acute in rural areas.
“The farther you get from our urban cities, or the smaller your business is, the more essential we become,” Canada Post President and Chief Executive Officer Dave Ettinger wrote in his 2023 annual report.
People with online operations have seen sales dry up and orders cancelled because they have not been able to guarantee delivery within a reasonable time.
And there is no guarantee that those sales will still be there after the strike has ended.
Certain businesses have been trying to think of different delivery methods, to eliminate the need for Canada Post. But options are limited. Private companies are more expensive than the Crown corporation and not all will provide service to remote communities.
At one point, a small local home-based business was considering driving to the United States and use the US Postal Service to deliver products to customers south of the border.
People are justifiably frustrated that Canada Post is a money-losing government-owned outfit employing thousands of employees who are widely perceived to be overpaid and underworked. But many people can’t live without the post office.
Which is why everyone has an interest in the survival of the corporation whose financial footing is nothing to write home about.
The picture was grim, even before the strike began.
In 2023, Canada Post recorded a loss before tax of $748 million, after posting a loss before tax of $548 million in 2022. “While change is a constant, the challenges we’re facing and our financial results make the situation more urgent,” Ettinger wrote in the 2023 annual report.
As the landscape has shifted from mail to parcels, cracks are rapidly appearing in the foundation of the postal system, he cautioned.
The COVID-19 pandemic had a silver lining for Canada Post, which for a few years dominated the parcel delivery sector. Canada Post was at one time the country’s ecommerce delivery leader, at one point delivering two thirds of Canadians’ online orders. By 2021, parcel revenue accounted for half of Canada Post’s annual revenue.
But that hold on the package delivery sector began to slip as competitors entered the market.
Low-cost private operators have chipped away at Canada Post’s business. Its share of the parcel delivery market has dropped from 62 per cent prior to the pandemic to 29 per cent in 2023.
A major stumbling block during contract negotiations has been Canada Post’s attempt to try to compete with the private sector. It has been banking on its plan to offer delivery seven days a week.
CUPW has been opposed to hiring part-time workers to provide weekend parcel delivery, complaining that new workers would be paid lower wages and receive fewer benefits than current Canada Post employees.
“Canada Post is now at a critical juncture – modernize and revitalize to serve a rapidly changing country or fall behind and struggle to keep it all going,” Ettinger stressed in his report.
The task is daunting.
Canada Post must achieve and maintain labour peace. It needs to improve and diversify its services, while not jacking up prices. And it must attempt to lower the sea of red ink that risks to swamp a service that has existed for as long as Canada has been a country.
The stakes are high. Who would have thought the post office could still be so important?
Let us know what you think at rmahoney@seawaynews.media
