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Canada Post warns of massive losses after back to work bill becomes law

Last Updated Nov 27, 2018 at 4:34 pm EST

A Canada Post worker returns to the Eastern Ave. letter processing plant in Toronto on November 27, 2018, one day after the Senate passed legislation to end five weeks of rotating strikes. CITYNEWS

Canada Post on Tuesday revealed deeper losses it’s booking because of a massive pay-equity order this year, while the federal government insisted back-to-work legislation that sent striking postal workers back to their jobs is constitutional.

In releasing its third-quarter financial results, Canada Post highlighted how it was bleeding red ink even before its unionized workforce started rotating strikes last month.

The losses, it said, were a direct result of a historic pay-equity ruling announced in September, which awarded suburban and rural postal employees a 25-per-cent pay hike.

“Canada Post recorded a loss before tax of $94 million for the third quarter of 2018, mainly due to the costs of implementing the final pay-equity ruling,” the corporation said.

The arbitrator’s decision was a hangover from the last round of contract negotiations between CUPW and Canada Post.

The agency said it expected pay equity would cost it $550 million by the end of the year, including a charge of $130 million that was put on its books in the final quarter of 2017.

Combined with the costs associated with the rotating walkouts that began Oct. 22 and came to a forced end on Tuesday, Canada Post said it expected to end 2018 with a loss, and that pay equity would result in ongoing annual costs of about $140 million.

Workers across the country headed back to work after the Senate passed legislation Monday night to end five weeks of rotating strikes.

The Canadian Union of Postal Workers (CUPW) Toronto local president Megan Whitfield told CityNews that the union has been blocking entrances to distribution facilities since 10 p.m. on Monday.

Whitfield said workers are “disappointed” and “upset” about that they are being forced back to work.

“Our constitution rights have been taken away from us,” she said outside the distribution centre in Mississauga.

The government deemed passage of the bill to be urgent due to the economic impact of continued mail disruptions during the busy Christmas holiday season.

The latest figures suggest there are more than 500 tractor-trailer-loads of mail being held up in parked vehicles at Canada Post facilities.

“We would like to know where these hundreds of trailers are because … a lot of the members were saying there was no mail. So we’d like to know where Canada Post has put the mail,” Whitfield said.

Labour Minister Patty Hajdu defended the constitutionality of Bill C-89, the Liberal government’s back-to-work bill, on Tuesday, saying it will ultimately be up to the courts to weigh in should the legislation be legally challenged by the union.

Speaking on Parliament Hill, Hajdu defended her government’s decision to bring forward legislation to respond to a “significant, growing economic harm” to Canada.

CUPW said it is exploring all options to fight it.

“After 37 days of rotating strikes, unconstitutional legislation has removed the right to strike for postal workers,” it said in a statement. “Legal strike action ends at noon today, but the struggle is not over.”

The union also said it has asked its members to return to their regularly scheduled shifts as noon Tuesday but said in the coming days it will call on its allies and members for a campaign including “mobilizations, demonstrations and non-violent civil disobedience.”

“All options remain on the table to achieve negotiated collective agreements that address health and safety, inequitable treatment, fair wages and working conditions, and the democratic right to free collective bargaining,” it said.

Hajdu said Tuesday the Liberal government is confident it was indeed the appropriate time to move forward with legislation, adding there wasn’t a way forward otherwise for the two sides.

“Obviously the Senate has done the work that they need to do and the legislation has passed,” Hajdu said. “That will be up to the courts to decide if the union decides to challenge the legislation.”

In 2016, CUPW won a legal challenge of back-to-work legislation in Ontario Superior Court.

However, Hajdu insisted Tuesday that the previous bill, introduced by the former Conservative government, was very different than that passed by her government.

Specifically, she said the Liberal government’s bill did not dictate how a number of issues should be settled.

She also said it appoints a mediator-arbitrator to be chosen either through the consensus of the two parties or in an independent way through advice given to her.

Earlier Tuesday, a group representing Canadian businesses praised the federal government for legislating postal employees back to work, saying it will help clear hefty backlogs of mail ahead of the busy holiday season.

The Canadian Federation of Independent Business said it was pleased Ottawa listened to business owners, who described the postal strike as “an emergency for many small firms and for Canadian consumers.”

Federation president Dan Kelly said 71 per cent of members it surveyed supported back-to-work legislation after two-thirds of small businesses reported they had been negatively affected by the strike.

“Back-to-work legislation is never an easy choice, but it will help salvage the holiday season for small firms and consumers,” he said in the statement.

Mail service was scheduled to resume Tuesday at noon Eastern after the Senate passed legislation ordering an end to five weeks of rotating strikes by postal workers.

Negotiations had been underway for nearly a year, but the dispute escalated more recently when CUPW members launched rotating strikes Oct. 22.

The walkouts have led to backlogs of mail and parcel deliveries at the Crown corporation’s main sorting plants in Vancouver, Toronto and Montreal.

Hajdu says recently passed back-to-work legislation includes framework for Canada Post to ensure “positive labour relations” within the corporation moving forward. Watch below.