The threat of industrial action looms over Canada Post as it negotiates with its main union the Canadian Union of Postal Workers (CUPW). Amidst the negotiations, Canada Post says that nearly all of its e-commerce customers have gone to other delivery companies.

Canada Post has said that it is “taking steps to respond to the rapidly deteriorating business situation”.

While the negotiations take place, the postal operator has said that it has notified the union that it will be changing the terms and conditions of employment for all the employees represented by the union beginning this Friday.

Most of the points of negotiation seem to be agreed, though the main stumbling block seems to be the employee pension fund that is facing a C$6.2bn deficit.

Canada Post claimed, “The uncertainty caused by the prolonged negotiations and the union’s strike mandate is having a negative and escalating impact on the postal service.”

One of the upshots of the threatened industrial action is that customers have been seeking other methods of delivery from other companies. “Nearly all of our largest e-commerce customers have already moved most or all of their parcel volumes to other carriers, resulting in a volume decline of at least 75% from these customers,” claimed Canada Post.

“The number of parcels arriving at our largest plants via transport trucks has declined to the point where there often are not enough parcels to last an entire processing shift.

“Lettermail is down in many facilities by as much as 50 per cent and over the weekend, commercial customers deposited half the mail they usually deposit.”

The postal operator said that it is now, “using the means provided in the Canada Labour Code” to respond to the “rapidly deteriorating volumes”; and then it spelt out what this will mean.

“As of Friday, July 8, 2016, the terms and conditions of the current collective agreements will no longer apply,” said Canada Post. “Under the new terms and conditions, employees will continue to receive their regular pay and some benefits such as applicable prescription drug coverage. Other items will be cancelled in line with the statutory minimum conditions established under the Canada Labour Code. The Corporation will also have the flexibility to adjust staffing according to the amount of work required.

“In order to take this step, Canada Post has followed the procedural requirements and issued a 72-hour notice to the union. The issuing of the notice does not necessarily mean that Canada Post will not be operating on Friday. It allows the Corporation to take measures that are necessary to respond to the changing business reality.”