Canada Post warns of massive losses after back to work bill becomes law

FILE: Drive-thru Parcel Centre designed for handling E-Commerce shipments (Photo By Raysonho @ Open Grid Scheduler / Grid Engine – Own work, CC0)

OTTAWA — Canada Post on Tuesday revealed deeper losses it’s booking because of a massive pay-equity order this year, while the federal government insisted back-to-work legislation that sent striking postal workers back to their jobs is constitutional.

In releasing its third-quarter financial results, Canada Post highlighted how it was bleeding red ink even before its unionized workforce started rotating strikes last month.

The losses, it said, were a direct result of a historic pay-equity ruling announced in September, which awarded suburban and rural postal employees a 25-per-cent pay hike.

“Canada Post recorded a loss before tax of $94 million for the third quarter of 2018, mainly due to the costs of implementing the final pay-equity ruling,” the corporation said.

The arbitrator’s decision was a hangover from the last round of contract negotiations between CUPW and Canada Post.

The agency said it expected pay equity would cost it $550 million by the end of the year, including a charge of $130 million that was put on its books in the final quarter of 2017.

Combined with the costs associated with the rotating walkouts that began Oct. 22 and came to a forced end on Tuesday, Canada Post said it expected to end 2018 with a loss, and that pay equity would result in ongoing annual costs of about $140 million.

While CUPW members celebrated the pay-equity award, a key issue in its ongoing labour dispute with Canada Post has been the treatment of those same rural and suburban mail carriers, known as RSMCs. They’re more likely to be female, and historically have been paid less, than their urban counterparts.

The union vowed Tuesday to continue fighting for equality for RSMCs, warning of potential court action over the government’s back-to-work legislation, Bill C-89.

It will ultimately be up to the courts to decide whether the legislation is constitutional, Labour Minister Patty Hajdu said on her way into a morning meeting with her cabinet colleagues, should it be legally challenged by CUPW.

“We’re confident that this was the appropriate time to move forward with this legislation,” Hajdu said. “There was a significant, growing economic harm to the country, small businesses were struggling, rural and remote communities were struggling. There really wasn’t a way forward for the two parties. They were at a complete impasse.”

The bill received royal assent on Monday after senators approved it by a vote of 53-25, with four abstentions.

CUPW said it is exploring all options to fight the legislation.

“After 37 days of rotating strikes, unconstitutional legislation has removed the right to strike for postal workers,” it said in a statement. “Legal strike action ends at noon today, but the struggle is not over.”

The union also told its members to return to their regularly scheduled shifts at noon Tuesday but warned it would soon call on its allies and members for a campaign that includes “mobilizations, demonstrations and non-violent civil disobedience.”

“All options remain on the table to achieve negotiated collective agreements that address health and safety, inequitable treatment, fair wages and working conditions, and the democratic right to free collective bargaining,” it said.

In 2016, CUPW won a legal challenge of back-to-work legislation in Ontario Superior Court.

However, Hajdu insisted Tuesday that the previous bill, introduced by the former Conservative government, was very different from the one passed by her government.

Specifically, she said the Liberal government’s bill did not dictate how a number of bargaining issues should be settled.

She also said it appoints an mediator-arbitrator to be chosen either through the consensus of the two parties or in an independent way through advice given to her.

Earlier Tuesday, a group representing Canadian businesses praised the federal government for legislating postal employees back to work, saying it will help clear hefty backlogs of mail ahead of the busy holiday season.

The Canadian Federation of Independent Business said it was pleased Ottawa listened to business owners, and described the postal strike as “an emergency for many small firms and for Canadian consumers.”

Federation president Dan Kelly said 71 per cent of members it surveyed supported back-to-work legislation and two-thirds of small businesses reported they had been negatively affected by the strike.

“Back-to-work legislation is never an easy choice, but it will help salvage the holiday season for small firms and consumers,” he said in the statement.

Canada Post said Tuesday that it could not live up to its normal delivery standards through the remainder of the year, and going into January 2019, as a result of backlogs of mail and parcel deliveries at its main sorting plants in Vancouver, Toronto and Montreal.

— with files from Terry Pedwell