Canada Post has rejected its union’s latest contract proposal, saying the offer would increase the Crown corporation’s labour costs by $1.4 billion and include the possibility of raising postage prices.
The Crown corporation would need to raise the price of postage by 15 per cent or request government support to offset the expense, Canada Post said Tuesday in a statement.
“The union’s offer would add $1.4 billion of new costs to Canada Post over the life of the contract and provides no compromises to address the challenges facing the company,” Canada Post said in a statement.
Among those challenges, Canada Post said it has experienced a double-digit drop in the volume of mail in the last decade due to the emergence of electronic alternatives and has a pension deficit of $3 billion.
“This round of labour negotiations is critically important to the future of Canada Post and the Crown corporation’s ability to provide affordable postal services to Canadians without becoming a burden on taxpayers.”
Canada Post said it has put forward a counter offer and has not yet initiated a 72-hour notice for a lockout.
It said the union’s latest offer would give employees a 3.5 per cent wage increase in each year of a new 3 1/2-year agreement, including in the final six months of a new deal.
In a statement, the union said Canada Post has dropped some “extreme” demands, but maintained others.
“Instead of identifying problems and discussing solutions, they came with ultimatums,” the union said.
Catherine Swift of the Canadian Federation of Independent Business said even though there are electronic and other alternatives for businesses, that accepting the union’s offer would increase costs.
“Certainly, it’s not like it used to be but there’s still a reliance on mail,” said Swift, president and CEO of the organization which has more than 108,000 members.
“Obviously, things like couriers have to be considered, things like postponing getting in touch with suppliers because payments still come via the mail. It could affect cash flow very negatively if payments were held up from customers and suppliers and basically increase costs,” Swift said from Toronto.
“It’s a big nuisance, to put it mildly.”
The union had threatened job action if a deal wasn’t reached by this week but the lack of a 72-hour notice effectively means there wouldn’t be a strike or lockout before Friday.
An earlier agreement covering some 50,000 employees expired on Jan. 31, and talks on a new deal began last fall. Last week, Canada Post reached an agreement with the union to bring in volunteer postal workers in some provinces to deliver cheques to pensioners and those on social assistance should a labour disruption occur.
Federal Labour Minister Lisa Raitt urged both sides late last week to reach a deal to avert a potential disruption of the country’s mail service.