Govind Tekale
Canada Post has reached a new agreement with its second-largest union after 18 months of tough negotiations, while talks with its largest union remain stuck in a difficult standoff.
The deal with the Canadian Postmasters and Assistants Association (CPAA), representing over 8,500 employees who manage rural post offices across Canada, includes an 11% wage increase spread over three years. Workers will receive a 6% raise in 2024, followed by 3% in 2025 and 2% in 2026, with all increases applied retroactively to January 1, 2024.
A federal arbitrator was involved in the final stages, with Canada Post stating that “the arbitrator noted that the Industrial Inquiry Commission (IIC) report – including its stark conclusions – had an impact on the negotiations.” Despite outlining serious financial problems at Canada Post, the report showed that “collective bargaining can work” even in challenging circumstances.
The new contract will remain in effect until December 31, 2026, bringing stability to postal services in rural communities.
Meanwhile, Canada Post continues struggling to reach a deal with the Canadian Union of Postal Workers (CUPW), which represents about 55,000 urban and rural mail carriers. These negotiations have also dragged on for 18 months with little progress.
CUPW implemented an overtime ban on May 23, 2025. The federal government stepped in recently, with Jobs and Families Minister Patty Hajdu ordering a vote on Canada Post’s latest offer.
Hajdu justified this unusual move by citing the “public interest” after 18 months of bargaining that included over 200 meetings. She also mentioned “significant disruptions to communities and small businesses.”
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CUPW strongly opposes this government intervention. National President Jan Simpson accused Canada Post and the government of “colluding to take away the rights of workers to freely and fairly bargain.” The union filed an “Unfair Labour Practice” complaint and urged its members to vote “no” on the offer.
These labor disputes are happening while Canada Post faces serious money troubles. The postal service has lost over $1 billion since 2018, including $841 million last year alone. In 2023, Canada Post spent $4.9 billion on labor costs while bringing in $6.9 billion in revenue.
The financial strain comes from several sources. Traditional letter mail has dropped dramatically, from 5.5 billion pieces in 2006 to just 2.2 billion in 2023. At the same time, Canada Post’s share of the package delivery market has fallen from 62% in 2019 to 29% in 2023, as private companies take more of this business.
To keep Canada Post running, the federal government provided temporary financial support of up to $1.034 billion for the 2025-26 fiscal year, which must be repaid.
Beyond wages, the CUPW negotiations involve several other contentious issues, including job security, part-time “flex” staffing models, and concerns about weekend delivery affecting work-life balance.
The outcome of these disputes will shape the future of mail service across Canada, potentially affecting everything from stamp prices to delivery frequency as Canada Post tries to modernize while maintaining essential services nationwide.
