Business group predicts pain at Canada Post after tentative contract deal reached

Canada Post will be forced to confront lost business, a massive pension shortfall and a parliamentary review of its operations in the coming years, the Canadian Federation of Independent Business says.

Canada Post and its workers have only come to a “peace treaty” in front of the bustling holiday shopping season, a business lobby group cautioned Wednesday, foreseeing little yet long -term pain for the Crown company. The labour dispute had been crushing endlessly for over nine months before the agreements were reached with each of Canada Post’s rural and urban carrier groups with the help of a special mediator.

Under the agreements, which could take months to endorse, an independent body will think about the pay equity issue that was at the center of the months-long work debate that saw laborers debilitate job action and Canada Post consider a conceivable lockout. In any case, the speculative two-year deals neglected to connect a key partition over the corporation’s mammoth pension plan.

Canada Post had looked for changes to the arrangement for new workers as it manages an expected $8-billion solvency deficit, demanding new contracts be secured by a defined-contribution plan instead of the current characterized defined-benefit plan. Be that as it may, the Canadian Union of Postal Workers shied away, blaming the agency for attempting to initiate a two -tier pension system. The agreements imply that any such request has been procrastinated on for no less than two years.

It won’t be clear until the fall how the labour dispute affected the corporation’s bottom line. The agency squeezed out what it described as a “break even” $1-million surplus in the first half of the year after recording a profit in 2015. But while Canada Post tallies its third quarter financial results, the agency must do everything it can to convince customers who may have dropped the postal service over the summer to come back, said spokesman Jon Hamilton.

“A lot of them have now had a little bit of experience with our competition,” Hamilton said. “That could be a good thing or a bad thing for us…. We need to rebuild that trust and work with them.”

The federal government launched a review of Canada Post operations in May after the planned cancellation of daily home delivery became a hot button issue during last year’s election campaign. A discussion paper from that review is expected to be released shortly, with public hearings scheduled to begin in late September.

CUPW has suggested Canada learn from other countries, such as France and New Zealand, to create banking outlets in small communities no longer served by the chartered banks. Canada Post has dismissed the idea as too risky.