Small businesses brace for holiday losses as Canada Post strike enters 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 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.

“I’m not looking at any other solution other than negotiation right now,” Labour Minister Steve 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, says 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:

James began looking at alternatives about six week ago and started using Canpar Express, UPS and FedEx for domestic deliveries. But he says they can charge three times the shipping rate, so it’s “cost prohibitive.” About 85 per cent of the parcels he sells are delivered by mail.

“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.

“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 says 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, 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 deliveries letters, but volume has decreased by more than 50 per cent over the last 15 to 20 years, bringing the focus to 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?

“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 those 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 amounted to 11.5 per cent. It also offered protection of the defined benefit pension for current employees, as well as job security and health benefits.