Small businesses brace for holiday losses with Canada Post strike in Day 3

With Canada Post workers on strike for a third day, small business owners say the walkout could not have come at a worse time.

Lorne James, who sells model trains in Tillsonburg, Ont., estimates he could lose $10,000 a day in online sales, judging from the month-long postal strike that his business had to deal with in 2018. That walkout ended in late November that year with back-to-work legislation.

“Coming into our busy season, where we make a third of our sales over two months, to be held hostage … it’s unacceptable, and for a rural business like ours, it’s not right,” James told CBC’s Rosemary Barton Live on Sunday.

James pointed out that the online shipping season is ending in two weeks for deliveries to make it on time for Christmas.

But the two sides appear nowhere close to a deal after nearly a year of negotiating. The federal government has indicated it’s not currently planning to intervene to end the strike by some 55,000 workers, who hit the picket lines early Friday.

WATCH | Business owner says he’s looking at losing $10K a day in online sales:

Chief political correspondent Rosemary Barton speaks to Lorne James, a small business owner in Ontario, about how the Canada Post strike is affecting his business ahead of a busy holiday season.

“I’m not looking at any other solution other than negotiation right now,” Labour Minister Steven MacKinnon told reporters in Montreal on Friday morning.

A spokesperson for the minister reiterated on Saturday that a special mediator, Peter Simpson, is on hand to support negotiations.

Jasmin Guénette, vice-president of national affairs at the Canadian Federation of Independent Business, said shoppers who may normally buy directly from small businesses may turn to shopping giants such as Amazon.

WATCH | Ottawa says it wants to give negotiations a chance:

The federal government has vowed not to enforce back-to-work legislation in the Canada Post strike. Ottawa has taken action during past postal strikes, but experts say changed circumstances make this time different.

James said about 85 per cent of the parcels he sells are delivered by mail. He began looking at alternatives about six weeks ago and started using Canpar Express, UPS and FedEx for domestic deliveries, but they can charge three times the shipping rate for international shipments, which is “cost prohibitive.”

“Right now, we’re holding our international [shipments] until the strike can either be legislated or mediated back, until we have a return-to-work program,” James said.

Onze Montréal, a clothing boutique specializing in women’s fashion, is also scrambling to cope with the work stoppage by the Canadian Union of Postal Workers (CUPW).

“Because it’s the holiday season, you know, people want fast deliveries and they want reliable carriers. Now that we’ve only been dealing with Canada Post, we don’t know how it’s going to be with other carriers,” said Layali Suwwan, an online salesperson at Onze.

On average, the boutique ships out 35 packages a day exclusively with Canada Post.

Suwwan said if the strike continues, the business may have to find an alternative courier, which could increase prices.

A more competitive business model?

Steven Tufts, a labour expert and associate professor at York University in Toronto, told CBC News Network on Friday that CUPW has some leverage in negotiations because of holiday spending, but there’s a bigger issue: What should the business model of a company that has lost money in the last six years look like in the future?

He said Canada Post is mostly based on a model that delivers letters, but volume has decreased by more than 50 per cent over the last 15 to 20 years, putting the focus on parcel deliveries to pick up the slack — although CUPW has been pushing for expanding services used in other countries, such as postal banking and seniors’ wellness checks.

WATCH | Is a shift in Canada Post’s business model necessary?:

Canada Post workers went on strike early Friday after the Canadian Union of Postal Workers (CUPW) said little progress was made during bargaining. York University labour expert Steven Tufts broke down some of the challenges to Canada Post’s business model and overall competitive pressures.

CORRECTION: A previous version of this description incorrectly quoted York University labour expert Steven Tufts saying CUPW had not built the large-scale public campaign needed to pressure Canada Post into changing its business model, despite Canada Post struggling financially. While Tufts did speak to Canada Post’s business model, he says CUPW has pressured Canada Post to broaden their mandates and expand their business model to offer a range of new services.

“As Amazon expanded its parcel deliveries, especially during the pandemic, it went to a whole range of different techniques to get parcels to people, with a range of subcontracted companies that will deliver parcels through really intricate networks using computer-aided artificial intelligence to make those transactions seamless,” Tufts said.

The difficulty with copying Amazon’s approach, he said, is that those workers are paid less than those at Canada Post.

Some of the workers who are subcontracted are unionized, such as those with Teamsters Canada whose members work for Purolator and have said they won’t deliver parcels that are traditionally delivered by CUPW members.

A key issue in the talks is wages. Canada Post has proposed wage hikes above inflation over four years. Its latest contract offer included annual wage increases that totalled 11.5 per cent. It also offered protection of the defined benefit pension for current employees, as well as job security and health benefits.

• How does the strike affect you? What should be done about it? Leave your story, questions and opinions here and you might be featured on Cross Country Checkup’s Nov. 17 show.