The United States Postal Service has suspended all mail and package delivery to Canada due to the ongoing strike affecting Canada Post.
“Effective Nov. 29, 2024, the Postal Service will temporarily suspend international mail acceptance to Canada due to the foreign postal operator indicating that they are unable to process or deliver international mail or services as a result of the ongoing national strike by the Canadian Union of Postal Workers,” reads the United States Postal Service’s service alert. “Customers are asked to refrain from mailing items addressed to Canada until further notice.”
The Canadian Union of Postal Workers announced its 55,000 workers would begin a strike on Nov. 15. The strike has already caused the delay of approximately 10 million package deliveries.
“Canada Post’s operations will shut down during a national strike, affecting millions of Canadians and businesses across the country,” reads the announcement.
The postal company’s busiest quarter is always the fourth quarter, thanks to the Christmas holiday season. A strike during this timeframe is a worst-case scenario for Canadians who rely on Canada Post.
The strike resulted from Canada Post proposing an 11.5% wage increase over four years. The union has requested a 24% increase over that time period to offset the rising cost of living.
In 2023, Canada Post’s operating costs largely went towards labour, accounting for $3.9 billion, or just over 50% of the Crown corporation’s nearly $7.8 billion in total operating expenses. When adding $1 billion in employee benefits, the share climbs to nearly 63%.
Despite the strike only being active for just over two weeks, the cost to small and medium businesses has already reached at least $765 million, or $76.6 million a day, according to the Canadian Federation of Independent Businesses.
The federation estimates that by Dec. 4, the cost to the sector will reach over $1 billion.
“It’s not the Grinch who is about to steal Christmas. It’s Ottawa sitting idly on the sidelines while small businesses are losing crucial revenue and sales due to circumstances outside of their control,” said Corinne Pohlmann, Executive Vice-President of Advocacy at CFIB. “The Labour Minister recently said mediation talks have been suspended because the two parties remain too far apart to reach a deal and that a long labour conflict is a possibility, but he is the one who has the power to put an end to this mess.”
Even before the strike, Canada Post reported a $315 million pre-tax loss in the third quarter of 2024.
Unlike most Crown corporations, Canada Post needs to turn a profit because it does not receive government funding.
“Even with Canada Post’s recently proposed stamp price increase, the Corporation projects that, without additional borrowing and refinancing, it will fall below its required operating and reserve cash requirements by early 2025,” said the postal operator.
The company has been bleeding money for years. The last time it posted a profit before taxes was in 2017, with a profit of $76 million. In 2023, Canada Post reported a loss of $748 million. Between 2017 and 2023, Canada Post lost almost $3.0 billion before taxes.
In 2006, Canada Post delivered 5.5 billion letters, seven per week per household. By 2023, this fell to 2.2 billion letters, two per week for each household.
“A system built to deliver 5.5 billion letters a year cannot be sustained on two billion letters,” said Canada Post.
The strike could not have come at a worse time, according to Canada Post spokesperson Jon Hamilton.
“We could post a record loss this year. The fourth quarter is where we make our money. It’s our busiest time of year. Nothing coming in. No revenue, no parcels. Those parcels are going elsewhere and having a huge impact on Canada Post, as well as the rest of the country, as small businesses and charities try and scramble and find alternatives,” said Hamilton.
Canada Post said it has tightened operational spending and scaled back investments to save money. However, the company said cutting costs is insufficient to offset its projected deficits.
Canada Post presented a “comprehensive framework” to the union representing its workers, the Canadian Union of Postal Workers, on Dec. 1. The framework is said to include proposals on the delivery model and flexibility on other key issues.
The union responded, saying it is reviewing the contents.
“CUPW and Canada Post have both provided adjustments to demands to the special mediator in hopes that he will restart the mediation process. As of now, the mediator has not informed us of a restart, but the Union is ready,” said the union. “The framework does not seem to take into account the Minister of Labour’s comments about the agreement needing to be ratifiable.”
