This week, the Canadian Union of Postal Workers launched a rotating strike in Victoria, Edmonton, Windsor and Halifax to try and force Canada Post to accept contract changes they say came about partially from the increased number of parcels postal workers are carrying.
But as they try to improve working conditions for their staff, they could lose the very businesses they are trying to accommodate.
As Dan Kelly, the president of the Canadian Federation of Independent Business said in a news release, “While a rotating strike may be less harmful than a general strike, it creates additional uncertainty for businesses at a critical time for many small firms.”
Many small businesses send parcels by Canada Post. According to the CFIB, about half of them still use the service for payments and invoices.
Every time postal workers strike, business owners look for alternatives. When your customers rely on getting your goods and you need to receive payments, waiting out a strike just isn’t an option.
It’s not just goods and payments. In its 2017 annual report, Canada Post talked about how much entrepreneurs rely on direct marketing mail.
Successful business owners have gotten where they are by adapting – and the last thing they will put up with is a government service that impedes their ability to do business.
With options like FedEx and UPS already available, Canada Post already has strong competition with parcels. There’s plenty of opportunity for other businesses in the letter delivery space – but for some archaic reason the Crown Corporation is allowed to maintain a monopoly on letters under 500 grams.
Under the current model, letter delivery isn’t profitable. As recently as 2008, Canada Post had no debt; but now the total amount totals over $8.1 billion. Last year just the interest payments on that debt totaled $44 million.
In the second quarter of 2018, Canada Post recorded a loss before tax of $242 million, while volumes of both packages and direct marketing rose sharply. They said a lot of the losses were a result of “adjusting how rural and suburban employees are paid.”
Could you imagine a private company reporting those kinds of losses with this vague of an explanation? Would their investors stand for it?
Doubtful. So why are we okay with it as taxpayers?
Maybe it’s time we let private competitors step in.
Ada Slivinski is the Founder & Principal of Jam PR, a boutique agency focused on helping small businesses get big exposure. You can reach her at [email protected]
