Business

Winners and losers already clear as a Canada Post strike or lockout draws nearer

As time ticks down to settle a contract dispute between Canada Post and its 50,000 workers, courier companies are already seeing a boost in revenue as small businesses brace for the worst.

Couriers see dollar signs, small businesses brace for the worst as time runs out in contract talks

Canada Post management credits its growing parcel service for much of its profits to date, and concedes the business is vulnerable if there is a work stoppage due to a strike or lockout when the current contract expires on Saturday. (CBC News)

There are already clear winners and losers this week as the deadline for a potential contract dispute between Canada Post and its workers inches closer.

Canada Post has warned customers that mail and parcels sent through the postal system this week may not get delivered if the service is shut down this weekend.

As a result, many businesses have now jumped to contingency plans to use alternate couriers, creating a big boost in sales for those companies.

At the same time, there's a lot of hand-wringing at small businesses that depend on Canada Post to receive or send payments.

The stakes are even higher for companies that depend wholly on mail orders.

Couriers seeing more business already

Postal service workers have been without contracts since late January 2016. The terms and conditions of those contracts — one for urban and another for suburban and rural workers — have been extended until Saturday.

Management or labour must give 72 hours notice ahead of a strike or lockout.

"We're already seeing a slowdown in our depots," said Canada Post spokesman Jon Hamilton. "Companies are making decisions to go around Canada Post. We hope many of them come back, but that's no guarantee."

That business is going to courier companies big and small as mail order operations — such as Tweed in Smiths Falls, Ont., which delivers medical marijuana to Canada's growing patient list — started switching over to a collection of courier services late last week.

John van Egmond, general manager of Speedy Messenger Service in Ottawa, said there has been a boost in sales of 10 to 20 per cent this week.

We could see an increase of 50 per cent to our business right now.- John van Egmond ,  general manager of Speedy Messenger Service

If the contract dispute is protracted, "we could see an increase of 50 per cent to our business right now," he said.

His couriers are paid per package and are equally optimistic if Canada Post shuts down.

"I mean, it's not a good thing to want, but the result is I have more work and a bigger paycheque," said Ottawa bike courier Kyle Fazackerley.

Empty mail boxes?

The Exchange

5 years ago
7:30
Business owner Jessica Watson and Ryerson University prof Joanne McNeish discuss the impact of a potential Canada Post labour disruption 7:30

Canada Post risks damaging its delivery business

Hamilton concedes that parcel delivery, which has been driving growth at Canada Post, is a competitive business and that could be damaged by a work stoppage.

In the delivery business, if you're not delivering you're just sending people elsewhere.- Jon Hamilton, Canada Post spokesperson

"This could have huge repercussions," said Hamilton.

"In the delivery business, if you're not delivering you're just sending people elsewhere."

But while couriers see dollar signs, small businesses could be hit hard.

Small businesses brace for worst

"This could be very detrimental," said Frank Baizik, who owns a wholesale cleaning product company called Sensibly Clean in Mississauga, Ont.

"We send invoices and we receive cheques by mail," said Baizik, who explains the loss of mail service cannot be easily replaced by more expensive courier companies.

For companies that depend on mail orders such as Ontario Beer Kegs, the impact could be even more serious, wrote Patrick Walker on the company's Facebook page.

This could be very detrimental.- Frank Baizik , owner of Sensibly Clean

"I am no fan of Canada Post to start with. They almost bankrupted me on the last strike," Walker wrote. 

Monique Moreau of the Canadian Federation of Independent Business said most small businesses will end up absorbing added delivery costs.

"Consumers are not really that patient with increased potential costs," said Moreau, adding couriers can't help businesses reach all clients since they're mostly available in large urban centres.

"In some rural areas Canada Post is it, so that's another element that's going to be problematic."

Moreau said members want to see Canada Post keep costs down by avoiding price increases to customers, so few are sympathetic to union demands.

"And they are a bit frustrated because they know at the core of this issue is salaries and pensions and for members of ours and other small businesses, who don't have pensions of their own, it's tough to watch this contract dispute go down," Moreau said.

Union accuses Canada Post of 'preparing to lock us out'

The president of the Canadian Union of Postal Workers, Mike Palecek, said union officials agree Canada Post should be trying to avoid a lockout or strike.

Couriers, including Ottawa bike courier Kyle Fazackerly, say they're already benefiting from the possibility of a Canada Post work stoppage. (CBC)

"This is not the time to provoke a labour dispute," said Palecek, adding "there's no justification for the cuts they're putting forward, but every indication we have is that they're preparing to lock us out."

A union spokesperson said it "will not be pulling the trigger on strike notice this Saturday," adding the union has a "plan to remain at the table."

The union has been in contract negotiations with Canada Post since late 2015.

Management will be in a position to lock out workers by Saturday, and both sides have said there's been little progress at the negotiating table.

The key issues in the dispute are wage parity between city and rural postal workers and the restoration of door-to-door mail delivery.

Clarifications

  • A previous version of this story stated that postal service workers have been without a contract since December 2015, and that those contracts expire Saturday. In fact there are two contracts, one of which expired in December 2015, and the other in January 2016. The terms of those contracts were extended until Saturday and expire on that date.
    Jun 30, 2016 1:41 PM ET

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