Some of Canada Post's biggest customers, including the federal government, are being told to make contingency plans ahead of a possible contract dispute with workers this summer.

Jon Hamilton, a spokesman for Canada Post, told CBC News that while the corporation is not trying to be "alarmist," it has decided to inform some key clients about the possible service disruption.

Canada Post and the Canadian Union of Postal Workers (CUPW) have been in contract negotiations since late 2015 to reach a new agreement for about 50,000 workers. 

CUPW president Mike Palecek says management will be in a position to lock out workers by July 2. Both sides say little progress is being made at the negotiating table.

Jessica Kingsbury, a spokesperson for Public Service and Procurement Canada, confirmed contingency plans are  underway "to ensure that socio-economic cheques, such as child tax benefits, Old Age Security Pension and Canada Pension Plan benefits, would be delivered by Canada Post if a labour disruption was to occur."

In an e-mail, Kingsbury added the Receiver General expects the payments "would be delivered on a specific day of the month. In this situation, some recipients of payments, such as Canada Pension Plan and Old Age Security, should expect to receive their payments earlier than normal."

She said there will be no impact on payments made by direct deposit. 

Talks moving slowly: Union

Palecek says "management is asking for unprecedented cuts."

CBC News obtained a memo being sent to CUPW members by their union on Friday. It lists some of the demands from management, including: 

  • Cutting the "more secure defined benefit" pension plan and switching to a "riskier defined contribution" pension for all members in the future.
  • A pay freeze for temporary workers for the life of the collective agreement.
  • Eliminating the paid meal period for employees.
  • Removal of stools in new concept stores.
  • Amending the promise of job security so it applies only to employees with 10 or more years of continuous employment instead of the current five years.

Hamilton declined to discuss Canada Post's position at the negotiating table, but he did say the company is looking for a deal that is "objective and fair."

"We hope to reach an agreement," he added, but it must reflect changes to the industry, as well as changing customer needs. 

'Online shopping happens seven days a week … but our structure for delivery is five days a week, during business hours.… We are looking for some flexibility.'
- Jon Hamilton, Canada Post 

Canada Post says Canadians are sending fewer pieces of traditional mail than they did a decade ago, which is having an effect on the corporation's bottom line.  

Hamilton says that in 2006, workers delivered five billion pieces of mail to 14 million addresses. In 2016, just 3.4 billion pieces of mail are expected to be delivered to 16 million addresses. The combination of less revenue and more territory to cover is a challenge Canada Post is dealing with.

Customer needs are also an evolving concern, Hamilton says. "Online shopping happens seven days a week … but our structure for delivery is five days a week, during business hours.… We are looking for some flexibility."

Expecting a lockout

CUPW has accused management of trying to provoke a labour disruption. Canada Post asked the federal government to send in third-party conciliators to help with the negotiation process. The union says asking Ottawa for help puts a timeline on talks, leading to the deadline in July.

"We are expecting Canada Post to lock us out," Palecek says.

"Management will have the ability to unilaterally change working conditions when conciliation is finished," Palecek adds. "We will be conducting strike votes in June in order to protect our members. If management moves in that direction, we need to have a strike vote in place so we can legally respond to their actions."