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Mediator appointed as Canada Post warns of pension problem

Canada Post says it earned a profit of about $1 million in the second quarter, as huge pension obligation looms


 
A postal worker delivers mail as an ongoing labour dispute between the Canadian Union of Postal Workers and Canada Post continues, Tuesday, July 5, 2016 in Ottawa. (Justin Tang/CP)

A postal worker delivers mail as an ongoing labour dispute between the Canadian Union of Postal Workers and Canada Post continues, Tuesday, July 5, 2016 in Ottawa. (Justin Tang/CP)

OTTAWA – With the clock ticking toward a potential work stoppage at Canada Post, lawyer and author William Kaplan was appointed Friday to seek an end to the months-long labour dispute at the Crown agency.

In appointing the seasoned mediator and arbitrator to lead a team of interveners, Labour Minister MaryAnn Mihychuk said her hope was the Toronto-based Kaplan could avert threatened job action by members of the Canadian Union of Postal Workers.

“I am hopeful that this will bring a new perspective to the negotiating table, which could motivate the parties to find a solution and move beyond their current impasse,” Mihychuk said in a statement.

“I continue to closely monitor the situation.”

The union issued a 72-hour strike notice Thursday, accusing Canada Post of forcing a labour disruption.

Nine months of contract talks between the Crown corporation and CUPW reached a stalemate this week with both sides saying they remained far apart on key issues including pay scales for rural letter carriers and proposed changes to pensions for future employees.

Adding fuel to its argument that its ability to meet the union’s contract demands is severely restricted, Canada Post revealed Friday that it earned a profit of about $1 million in the second quarter of operations this year, a result it termed “essentially break-even” compared with a before-tax loss of $31 million during the same period a year ago.

It credited recent cost-cutting and a growing parcel delivery business for the small profit.

A customer arrives at a Canada Post post office as an ongoing labour dispute between the Canadian Union of Postal Workers and Canada Post continues, on Tuesday, July 5, 2016 in Ottawa. (Justin Tang/CP)

A customer arrives at a Canada Post post office as an ongoing labour dispute between the Canadian Union of Postal Workers and Canada Post continues, on Tuesday, July 5, 2016 in Ottawa. (Justin Tang/CP)

However, the fiscal black ink was far overshadowed by a daunting pension obligation, Canada Post warned.

“Canada Post’s pension solvency deficit . . . is estimated at $8.1 billion as of July 1, 2016, up from $6.1 billion at December 31, 2015 (using the market value of plan assets),” the agency said.

“The large size and volatility of this obligation compared to the corporation’s revenue and profit presents a major challenge to the corporation’s financial self-sustainability.”

MORE: What’s the future of Canada Post?

Canada Post wants move from a defined benefit pension plan to a defined contribution plan for new employees, a move CUPW said would create a two-tiered pension system.

The union has been arguing for wage parity between rural and urban postal workers, claiming that rural carriers earn, on average, roughly 30 per cent less than city carriers.

Mihychuk indicated Thursday the pay equity issue should be taken off the table.

“The prime minister and this government is fully committed to pay equity,” she told reporters outside a Liberal caucus meeting in Saguenay, Que.

“We actually do not believe that pay equity should be a negotiable item. It’s the law of the land and needs to be implemented,” she said.

It was not immediately clear whether a work stoppage — if it happens — would result in a disruption of mail and parcel deliveries.

CUPW said Thursday the strike notice it delivered to management did not envision a full-blown walkout.


 
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