Canada's Postal Strike

Location Date: 
June 27, 2011

Today marked the official end of the 7th Canada Post strike in the past 30 years.  The Canadian Union of Postal Workers (“CUPW”) has come up on the short end of the stick, having taken on a new majority Conservative government and a public that has become disheartened, to say the least, with “cushy” government union jobs and pensions.  CUPW workers are actually getting less than what management originally offered!

But what is more interesting than “who won or lost”, is the big picture issue of the role of Canada Post in our daily lives and the pending shift in our fiscal situation.

On the former, monopolies are generally wonderful investment opportunities.  These companies can dictate price with little concern for efficiency or productivity.  However, once competition enters the game, it is a different story.  The internet is the competition - in fact, it is so pervasive in my life that I barely noticed not getting the mail!  According to the Globe & Mail, the average number of pieces of mail has actually fallen 26% from 2006 levels.  Ironically, the strike will actually encourage even more businesses (especially small businesses) to go online to facilitate billing and collection, advertising and promotion, etc.  For Canada Post, as demand is falling, management does what it can to stay competitive – better technology, outsourcing, new work patterns etc.  But it will be all for nothing – this is a terminal business and one the government should actually be trying to sell as soon as possible.

On the fiscal side, there is no question that our taxes will have to go up in one way, shape or form.  There will be tremendous pressure on government unions to curb wage growth, relax benefits and reshape pension programs to be more in line with the private sector.  This will have broad public support particularly if unemployment remains high for the foreseeable future.  If I could “short” public sector unions, I would!