The stop-gap deal between Canada Post Corp. and the Canadian Union of Postal Workers includes maintaining the defined benefit pension plan for all current and future permanent employees, according to the union.
The tentative agreement, reached late on Aug. 30, will last two years, instead of the usual four. Bargaining will resume next year, during which the union will continue to protest solvency testing as an adequate measure of Canada Post’s ability to fund its defined benefit pension plans. It will also continue to push for expanded postal banking services.
Read: Canada Post and union reach tentative agreement
Before bargaining resumes, the union will work with a third party to develop a report about pay equity between rural and suburban mail carriers.
“We are confident of what this report will say: that [rural carriers] make 30 per cent less than their urban counterparts for doing work of equal value,” said CUPW president Mike Palacek. “This report will be immediately followed by negotiations to implement the findings.”
Read: Canada Post should be exempt from solvency testing, union argues
In the short term, the agreements will be good news for businesses that had expressed concerns about how they were going to deliver goods to customers as the Christmas period approaches, said Canadian Federation of Independent Business president Dan Kelly.
“Certainly it will be a relief for a lot of small business owners . . . that there is a peace treaty at the moment,” said Kelly. “Even the threat of a job action has meant that businesses have had to look at alternatives in advance.”
But a combination of reduced letter volumes, customers lost for good because of the labour strife and the giant pension hole means dark days ahead for Canada Post, he predicted.
Read: Pensions not the only issue in Canada Post dispute
“This deal will not do anything to fix the long-term problems that the corporation has,” said Kelly. “This will inevitably bite the corporation and bite workers.”
It won’t be clear until the fall how the labour dispute has 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. During the second quarter, Canada Post’s pension solvency deficit rose to an estimated at $8.1 billion as of July 1, 2016, up from $6.1 billion as of Dec. 31, 2015, the corporation noted in a report last month.