Canada Post talked up impacts of 2011 labour dispute, says union

A year on from the Canadian government ordering Canada Post back to work after its month-long industrial action, Canada Post has been accused of exaggerating the financial impacts from the disruption. The Canadian Union of Postal Workers issued a white paper today claiming that Canada Post and key business lobby groups gave “wildly inflated estimates” of postal losses, volume reductions and job losses in the economy at large following the strikes and lockout last June.

The union said the exaggerations were politically motivated, to attack workers’ collective bargaining rights.

CUPW, which has still not finalised the details of a labour agreement with Canada Post for its 48,000 urban-based members with arbitration still to complete, said in the white paper that it believed the total cost to Canada Post of the strikes and lockout “was likely in the vicinity of $58m”.

The union said the figure was certainly less than the “hundreds of millions” in losses attributed to the labour disruption by Canada Post CEO Deepak Chopra.

Canada Post spokesman Jon Hamilton told Post&Parcel this afternoon that the union’s white paper had calculated the financial impacts of last year’s action through only a “narrow window”.

“Not that we even agree with their number for that window, but when your business is focussed on delivering letter mail and the union takes action to disrupt that, you are going to see a very significant impact,” he said.

Numbers

Last year’s $327m loss, the first annual loss at Canada Post for 17 years, was caused mostly by the $150m damages ordered by the Supreme Court last year, and one-off payments required to pay down some of the Canada Post pension deficit, the union suggested.

Within the white paper, the union also dismissed Canada Post’s claims that the labour dispute had harmed mail volumes in the long term, stating that volume declines seen in 2011 “mirrors the experience of 2010”.

The union said parcel volumes have even been going up, with its members suggesting so far in 2012 parcel volumes have been growing by 35% year-on-year thanks to e-commerce.

CUPW also rejected claims by the business community that the postal disruption had anything other than a “negligible” impact on the Canadian economy as a whole, pointing to a 28,000 increase in job creation during the month of the disruption.

The greatest impact from the disruption was a deterioration in labour relations, the union said.

Denis Lemelin, the CUPW national president, said: “The paper demonstrates that postal back-to-work legislation, which was passed one year ago today, was not enacted for economic reasons. It was enacted because our government has it out for workers.”

Hamilton said the union had been correct to say that mail volumes have been declining for some time – down 20% in five years – but said it was wrong to suggest that the labour dispute had not worsened the situation.

“The decline in the letter mail and direct marketing has increased, and we are continuing to see that, and it’s something we need to address,” he said. “The issue now is that our customers have alternative channels that they didn’t have a few years ago. Strike and you’re encouraging customers to move to those alternatives, and push their customers to also consider other options.”

Mailers

The National Association of Major Mail Users (NAMMU) has sent a new survey of its members to Canada Post executives, suggesting that the economic impact from last June’s labour dispute were “significant”.

The lobby group for Canada Post’s larger customers said its members believe Canada Post has not done enough to provide mail discounts and work on educating the business sector to help mail volumes recover from the dispute.

Kathleen Rowe, the NAMMU president, said: “The negative effects of last year’s service disruption and subsequent performance issues continue to have a significant impact on mailers’ choice of media, according to survey results.

“We need to influence a positive mail dynamic for business users who can access a multi-media platform.”

NAMMU is pushing for Canada Post to bring in short-term incentives to grow the mail such as allowing mailers to send letters up to 60g in weight for the 30g price – effectively a borrowing of the “Second Ounce Free” campaign being run by the US Postal Service.

The lobby group is also suggesting a move by Canada Post to bring in seasonal pricing to lower prices in slow periods. But, the group said in the long-term, the answer to mail volumes is more awareness work, to educate businesses about the power of mail.

“Our members believe that the industry has an effective role to play that can enhance the business outcome for Canada Post,” said Rowe. “We need to jointly tap into that widespread expertise, foster innovation, and mutually improve our 2012 business results.”

Canada Post’s Jon Hamilton said he had not yet seen the full NAMMU report, but said: “Canada Post believes deeply in the value of the mail as a communications channel. It has a number of advantages over other communication channels, but we need to make sure that businesses know the value it means for especially their marketing dollars, which are scarce in many organisations at the moment. We need to fight for the mail.”