A Real Cost of Canada Post Strike

Canada Post, a Crown Corporation has been on strike for over 2 weeks. First rumors about possibility of strike appeared last year. Situation heated up by May of this year and on June 2, 2011 strikes began starting from Windsor, London and by mid last week, entire union was on strike.

While there is a lot of speculation on the fact that mail is declining business and no one needs flyers any more, national postal service is a basic necessity.

  • Many people felt the real inconvenience when their pay checks didn’t arrive in the mail putting their mortgage payments at risk or incurring interest for overdue bills.
  • Businesses suffered the most. Much buzzed story about bumble bee queens that were stuck at the warehouse facing imminent death.  Many other animals were stranded in dark rooms without food or water and limited air. Large shipments of live fish were delayed – both exotic and feeder fish that is used to feed another aquarium fish, leaving some again, with no food.
  • Online retailers were forced to look for alternative ways to deliver mail that in many cases are more expensive, thus losing revenues.
  • Lost sales tax due to lost retail opportunities would add up to the list of overall losses.
  • Some business, such as honey production may even need to lay off their own workers as they now are facing production deficit.

In our own calculation the real cost of the Canada Post strike is close $1 billion not including the losses of the Crown corporation.
According to Globe and Mail, Canada Post corporation alone lost close to $100 million in revenues due to cancelled contracts. I am sure that class action law suits to follow from businesses around the country.

While public opinion divide and some people support the strike idea citing to the fight for the general standard of living, others disagree referring to the fact that a country with true capitalistic system has no place for unions. Obviously in Canada human rights law is one of the most extensive in the world. There are laws protecting workforce from abuse, mis-pay and setting one of the highest in the world standard of working conditions. Minimum wage in Ontario is $10.25 per hour.

According to Toronto Star, the government had threatened back to work legislation if strike continues. The legislation assumes penalties for the union including up to $50,000 a day for union or company official, and up to $100,000 a day for the company or union. Individuals could face up to $1,000 a day. Whether the legislation would be effective we shall see, until now UPS is our only option.

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