Canada Post is restructuring whether or not Ottawa leads the way: Ian Lee in National Newswatch

This article originally appeared in National Newswatch.

By Ian Lee, July 31, 2025

Following a directive from the Canadian Industrial Relations Board (CIRB), members of the Canadian Union of Postal Workers are voting on what the Canada Post Corporation has called its “final offer” after more than 18 months of negotiations and an intermittent strike. As the Aug. 1 voting deadline approaches, the union is urging rejection and a “no” vote appears likely — setting the stage for Ottawa to once again be dragged into the labour dispute.

The federal government occupies a unique role: it is Canada Post’s sole shareholder, regulator (under the Constitution Act and Postal Charter), and financial lifeline. As the corporation’s 2024 Annual Report shows, it is out of funds and now reliant on government bailouts — such as the $1 billion rescue the government provided in January 2025.

Canada Post’s current offer goes beyond traditional collective bargaining, and reflects its desire for a larger restructuring of the corporation. It seeks to address steep declines in letter delivery while boosting Canada Post’s competitiveness in more lucrative parcel shipping services. Key components of the proposal include weekend part-time staffing, lifting the rural post office franchising moratorium, ending the five-day delivery mandate to 18 million addresses, and introducing “dynamic routing” — the use of software to boost efficiency by adjusting carriers’ routes based on day-to-day needs.

A union rejection of the employer’s offer would all but guarantee continued billion-dollar bailouts by Canadian taxpayers annually. As noted in Canada Post’s 2024 audited annual report, the corporation has exhausted its available financial resources and cannot sustain operations without government support.

The union has stated that, should members reject the offer, it would seek a return to the bargaining table. However, this is not viable. A fall 2024 bargaining failure led to a nationwide postal strike in November and December that year. The impasse prompted Ottawa to intervene, directing CIRB to extend the collective agreement and order employees back to work.

The negotiation’s failure was further detailed in a 2025 CIRB-commissioned report by mediator William Kaplan. The report says Canada Post is facing an “existential crisis” and is “effectively insolvent, or bankrupt.”

Kaplan’s conclusions echoed the structural reforms recommended in my 2024 report, Canada Post is at the Tipping Point. These include: amending the Postal Charter to revise delivery standards; lifting the moratorium on rural post office closures; ending door-to-door delivery in favour of community mailboxes; introducing dynamic route scheduling; and allowing Canada Post flexibility to hire part-time employees.

Yet each of these urgent reforms is firmly opposed by the postal workers’ union, which continues to deny the corporation’s existential crisis. The union’s intransigence suggests a return to bargaining will not yield a different outcome.

Kaplan recommends the government allow a strike or lockout to pressure the parties into a resolution. However — as my 1989 PhD thesis and subsequent studies have shown — past governments, both Liberal and Conservative, have consistently intervened in postal strikes due to strong public and business pressure. There is no reason to believe political dynamics have changed.

This leaves only one credible path: Ottawa must legislate a fundamental restructuring of Canada Post — as recommended in my 2015 and 2024 reports, and reaffirmed by Kaplan. Such a bill would face strong union opposition, but inaction is unsustainable. Letter mail volumes have collapsed, and the post office’s post-pandemic market share of parcel deliveries dropped from 62 per cent in 2019 to just 24 per cent in 2024 — prior to the labour dispute.

Canadians now face a stark choice: support structural reforms in response to the profound economic, demographic, and technological shifts transforming postal services, or deny these empirical realities and continue subsidizing ever ballooning deficits.

The latter will produce what I characterized in a 2018 article as a “Potemkin post office” — an expensive, symbolic shell of its former self. Such a shell cannot be maintained in an era of escalating federal deficits, rising demands for defence and border security investments, and calls for economic supports to weather the ongoing trade war with the United States.

Some will argue that reform can be postponed. This is dangerously naïve and demonstrably false. The irreversible technological and market changes driving this transformation have been unfolding for years.

The only remaining question is what will lead Canada Post’s response: government, or a crisis?

Ian Lee is an associate professor at Carleton University’s Sprott School of Business, and a contributor for the Macdonald-Laurier Institute.