Canada Post has narrowly avoided a nationwide mail disruption after the Canadian Union of Postal Workers (CUPW) held back from launching a full strike. However, the decision to enforce a nationwide overtime ban has inflicted notable damage on the company’s parcel delivery business, causing uncertainty for shippers and consumers alike.

Overtime Ban Instead of Strike

As of Friday, CUPW members have begun a “work-to-rule” campaign, refusing to work beyond their standard eight-hour or 40-hour week. The union’s strategy aims to minimize disruption to the public while maintaining pressure on Canada Post in their ongoing contract negotiations, which have been stalled for nearly 18 months.

Canada Post acknowledged the operational impact, warning customers to expect potential delivery delays. Many mail carriers are instructed to return to their depots after eight hours, even if their routes are incomplete.

Customer Confidence Shaken

While Canada Post is still functioning, the threat of labor disruption has already pushed many customers—especially small businesses and international e-tailers—to alternative logistics providers. This shift follows the deep scars of a five-week strike in December that led to service interruptions, delayed shipments, and a significant backlog that took weeks to resolve.

Executive Director of the International Mailers’ Advisory Group Kate Muth said many U.S. companies have preemptively halted shipments via the USPS-Canada Post channel. “It’s going to be very damaging for Canada Post if there is a strike,” Muth explained. “Once stuff moves out of the Canada Post system, people are reluctant to return.”

Alison Layfield from ePost Global echoed the concern, noting that some shippers now instruct customers to use physical addresses instead of PO boxes to avoid parcels getting trapped in the Canada Post system.

Contract Disputes and Missed Opportunities

The dispute centers around several core issues, including wages, benefits, work structure, and delivery models. Canada Post’s latest midweek offer includes a 13% wage increase over four years and keeps most existing benefits intact. However, the CUPW criticized the package as insufficient, particularly as inflation and cost-of-living increases outpace the proposed raises.

Other points of contention include:

• Part-Time Employment: Canada Post wants to increase the number of part-time delivery workers from 10% to 30%, especially to cover seven-day parcel delivery in urban areas. The union opposes this, advocating for more stable, full-time roles.
• Dynamic Routing: The company aims to implement dynamic delivery routes based on real-time volume, similar to private couriers. CUPW argues that the technology and route measurement systems are unreliable enough to ensure fair workloads.
• Load Leveling: Canada Post proposes allowing supervisors to redistribute workloads between employees during shifts without extra pay—another move the union opposes.
• Benefit Eligibility Delays: Under the company’s proposal, new hires would need six consecutive months of employment before qualifying for health and pension benefits.

Canada Post insists its offer reflects the company’s financial and operational challenges. The postal operator has not posted a profit in seven years and recently accepted a $716 million government loan to stay afloat. The shift from letter mail to parcels has strained its traditional business model, with mail volume dropping by over 50% in two decades.

Industry Reactions and Long-Term Consequences

In the logistics industry, parcel consolidators and cross-border service providers have been actively shifting volume away from Canada Post. Many fear that even temporary disruptions could result in long-term loss of trust, especially from U.S.-based shippers.

“Once businesses adapt to using other last-mile carriers, they rarely return unless necessary—particularly in rural areas or for PO box deliveries,” Layfield said.

If the overtime ban continues or escalates into broader strike actions, Canada Post risks not just temporary setbacks but permanent erosion of its customer base.

Conclusion

While Canada Post has sidestepped an all-out strike for now, the consequences of prolonged labor uncertainty are already being felt across the parcel delivery ecosystem. The longer the dispute lingers without resolution, the more difficult it may be for Canada Post to regain its footing—both operationally and reputationally—in a rapidly evolving logistics landscape.