Canada Post's last-minute proposals are not substantial enough to ward off a strike set to launch in Winnipeg overnight, the postal union says.

Earlier in the day, the Crown corporation made what it said were a number of compromises on issues including sick days and hiring future employees.

But Canadian Union of Postal Workers president Denis Lemeli said while there was "some movement" on the part of Canada Post, there was "nothing on the major outstanding issues."

"After more than seven months of difficult and frustrating negotiations, CUPW has initiated strike activity," Lemelin said in a news release issued after 6 p.m. ET Thursday.

"Tonight, members of the Winnipeg local will be the first postal workers to legally strike in more than 13 years."

The union had said Winnipeg would be the focus of the first strike activity by postal workers if they failed to reach a deal with Canada Post by the midnight Thursday strike deadline.

Winnipeg was chosen for the first strike activity because it was the first city to be affected by Canada Post's modernization program.

According to the release, the changes resulted in a sharp deterioration of service, as well as health and safety problems for postal workers due to new work methods and equipment, said the release.

It said the strike would continue for 24 hours in Winnipeg, then expand to other locations to be announced later.

In a news conference Monday, Lemelin said the union has "historically" reached a deal very close to the deadline.

Canada Post spokesperson Jon Hamilton said the corporation is not contemplating locking out its workers at this time and hopes the union will continue negotiations past the strike deadline.

Canada Post is aware of CUPW intentions for rotating strikes and said its priority remains the safety of its workers and security of the mail and its facilities.

Some mail would get through

In the event of a strike, Canada Post will cease nearly all mail delivery, with the exception of monthly social assistance payments such as government pension cheques, veteran's cheques, as well as welfare and child benefit cheques.

Those cheques will all be delivered in one day by letter carriers in uniform who had agreed in advance to be on the job through a work stoppage, Hamilton said.

While some retail postal outlets will remain open, all letter boxes will be sealed to prevent mail being "trapped" in the system, he added.

Labour Minister Lisa Raitt was encouraging Canada Post and CUPW to settle their dispute at the negotiating table.

The federal government has warned that a postal strike could harm the Canadian economy.

The last time Canada Post workers went on strike was in 1997. The government of the day forced an end to the strike with back-to-work legislation after about two weeks.

While a postal strike in 2011 won't have the same impact as those in the 1980s or 1990s, "mail delivery is still a life-line to small business, rural communities, seniors and charities who rely on mail campaigns to raise money," Hamilton said.

The Red Cross, for example, which is trying to raise $1 million to fund community projects through a lottery, said in a news release that "a strike will gravely affect the final week of ticket sales, and the final outcome of the 2011 Red Cross Lottery."

Canada Post had tabled an offer that included a defined benefit pension plan for both new and existing employees, up to seven weeks vacation and job security.

But after more than seven months of contract talks, the union rejected Canada Post's final offer and tabled its own counter-offer on Monday.

Canada Post called the union's offer "out of touch" with the challenges currently facing the Crown corporation, which includes a core letter mail business that has fallen by more than 17 per cent since 2006, and a pension deficit of $3.2 billion.

The union, which represents close to 50,000 letter carriers and other workers, is asking for a four-year contract with wage increases of 3.3 per cent in the first year and 2.75 per cent in years two and three. Sick leave and pensions are also issues.

The average starting wage for postal workers is $23 an hour.