This labour dispute is a real test for the new government. Will it be the same old or will they chart a new path?

We can add another one: cost-sustainable daily mail delivery to the doors of every Canadian. At a time when most of us obtain our communications electronically and our goods from companies that deliver such as Amazon, from which we can get whatever we want the next day, postal service seems like a quaint anachronism.

In 2006, Canada Post delivered 5.5 billion letters annually. By 2023, it was down to 2.2 billion and projections indicate a continuing decline. Also in 2006, Canadian households were receiving an average of seven letters per week; in 2024, that declined to two letters per week, while the number of addresses increased by more than 20 per cent. In 2019, Canada Post accounted for 62 per cent of the parcel market; in 2023, that number had dropped precipitously to 29 per cent.

Does daily mail delivery to more than 17 million addresses make sense when letter mail has dwindled to almost nothing?

Throughout the world, daily mail delivery is disappearing. Denmark, a country far more densely populated than ours, realized postal delivery was unsustainable and simply eliminated it, rounding up all the mailboxes.

Taxpayers subsidized Canada Post to the tune of one billion dollars this year when most Canadians receive little value from it. Yet many indigenous and rural communities remain reliant upon it.

So, what is the role of government? After a five-week strike, the federal government stepped in, appointing prominent arbitrator William Kaplan, who has always had the respect of both unions and management teams throughout the country, to commission a report.

Kaplan, noting that Canada Post is technically insolvent, described the bargaining dilemma that led to the five-week strike as follows: “Canada Post insists that a process leading to transformative change must begin. Business as usual cannot continue if it is to adjust to the new business reality. CUPW (Canadian Union of Postal Workers), in contrast, is intent on defending gains made over decades of collective bargaining, which is completely understandable. Between these opposites, a common ground must be found — one that recognizes that both parties have legitimate interests.”

Kaplan is correct about the very rich collective agreements that CUPW has extracted over many years from Canada Post. And such agreements are not uncommon in the unionized public sector.

In the private sector, market discipline creates a shared interest between unions and employers. If the union strikes the company for too long and their customers go elsewhere or it demands unsustainable wages and benefits, the company will not survive — resulting in lost jobs and no union dues.

There is no similar market discipline in the public sector where, by contrast, the ultimate decision-makers, politicians, are focused on averting a strike so as to not hurt them electorally.

Paying excessive wages has little political cost since the consequences will not reverberate for many years — often not until the politician is no longer in office and no one will recall who agreed to the outrageous salary increases, by then, years earlier.

Decades of concessionist management have left us where we are now — with a desiccated postal service, long abandoned by most Canadians.

Kaplan focused on what is required for Canada Post to continue — primarily ending the collective agreement restrictions preventing the employer from assigning workers additional work when they finish their assigned shifts early or from hiring part-time workers for weekends and high-volume periods. He also called on the government to lift restrictions on  closing once-rural post offices in areas that have become urbanized and community mailbox conversions.

CUPW has delivered a strike notice for this Friday. As Kaplan, a prominent interest arbitrator himself, noted, government imposed arbitration will not resolve the structural problems at Canada Post since interest arbitrators do not restructure collective agreements, which is what is required here. The only hope is for the parties to realize their position and restructure their collective agreement though negotiations.

This dispute is a real test for the new government, particularly for Prime Minister Mark Carney and his new jobs minister, Patty Hajdu. Will it be the same old or will they chart a new path?

Hopefully, the government will resist the temptation to interfere and impose arbitration. That would only extend the agony with a new collective agreement. A strike will once again force Canadians to resort to other delivery means, exacerbating the crisis further. But if negotiations fail, the rigours of a strike will be the only hope for making the necessary changes to the collective agreement.

Kaplan has pointed a way forward, one which, historically, CUPW has ardently fought. Will the parties accept what is now a necessary challenge and conclude a sustainable collective agreement, hopefully before Friday’s strike?