THIS STORY HAS BEEN UPDATED: Canada Post yesterday issued a counter-offer to the proposal put forward by the Canadian Union of Postal Workers on May 23, which the post office soundly rejected as representing "a step backwards as it provides no realistic solutions to the problems facing the postal system."

CUPW said it would issue its formal response to the new Canada Post offer today, postponing any strike action till after May 28. The union must give a 72-hour notice of any strike activity. UPDATE: CUPW this afternoon informed its members on the new terms of the Canada Post proposal, but gave no indication of strike activity. The union stated:

"CPC’s revised final offer includes one proposal for an improvement which is a slight increase in their wage proposal. They have also reneged on two aspects of their previous Global offer and dropped some other demands for rollbacks. Many of the union’s priority demands are not addressed."

CUPW suggested earlier that Canada Post's counter-offer exaggerated the cost of union demands. The post office "made a statement that CUPW's proposals will cost $1.4 billion over the next 4 years. There was no explanation of these figures. Exaggerating the cost of union demands is a tactic that has been used by CPC in all previous rounds of bargaining to distract attention from the real issues and justify taking a hard line during negotiations."

"For sixteen consecutive years CPC has been profitable," said CUPW president and chief negotiator Dennis Lemelin in a statement. "Yet, throughout the current negotiations, the Employer has taken extreme positions concerning the financial aspects of the negotiations. Instead of identifying problems and discussing solutions, they came with ultimatums. In their global offer, they dropped some extreme demands, but maintained many others."

Major sticking points include wages, sick leave and new-employee pension arrangements. The union has produced a chart purportedly showing the differing viewpoints.

Canada Post said it would need to raise postage costs by 15% or ask for government subsidies to pay the increased costs in the union's proposal. The post office's full response to the union offer is below:
 
Canada Post Press Release

Ottawa, ON, May 24: Canada Post’s negotiation team expressed disappointment after reviewing an offer put forward by the Canadian Union of Postal Workers (CUPW) as part of the collective bargaining process. 
 
In a formal response to the union, Canada Post made clear that CUPW’s offer represents a step backwards as it provides no realistic solutions to the problems facing the postal system. The union’s offer would add $1.4 billion of new costs to Canada Post over the life of the contract and provides no compromises to address the challenges facing the company. 
 
Already struggling with declining mail volumes, Canada Post would need to raise the price of postage by 15 per cent or request government support to cover the increased costs put forward by the union. CUPW’s proposals do not provide the basis for a labour agreement that would avert a damaging work
disruption.
 
Despite participating in collective bargaining for the past eight months, CUPW has tabled an offer at the 11th hour that falls back on the union’s original demands and is focused more on holding onto the past rather than building a strong future for Canada’s postal system. The proposals add enormous costs to a company that is grappling with a steady decline in its core Lettermail business. For example, the union has proposed:
 
• Giving employees a 3.5 per cent wage increase in each year of a new three-and-a-half-year agreement – including in the final six months of a new deal.
 
• The Union’s counteroffer does nothing to address Canada Post’s pension solvency deficit of over $3 billion.
 
• Having postal workers perform snow removal and landscape design at Canada Post offices, mail sorting plants, and letter carrier depots.
 
• Changes to the delivery of advertising and promotional mail that will significantly increase the company’s costs and put that entire business at risk. 
 
This round of labour negotiations is critically important to the future of Canada Post and the Crown Corporation’s ability to provide affordable postal services to Canadians without becoming a burden on taxpayers. In the last decade, the business of Canada Post has changed dramatically as electronic substitutions to traditional mail have eroded the company’s core business and resulted in double-digit declines. At the same time, the number of addresses Canada Post delivers to increases by about 200,000 each year. The company is also grappling with escalating pension costs. 
 
Despite this setback in the labour negotiations process, Canada Post remains committed to reaching a negotiated settlement that will protect postal services, minimize future postal rate increases, and improve employee wages. Talks between the company and union have intensified in an attempt to obtain a collective agreement that meets the needs of customers, employees and the company. 
 
With no strike activities planned for this week, there is time to negotiate a fair and reasonable deal. Even with a continued decline in mail volumes, Canada Post has tabled a competitive counteroffer to CUPW that gives employees better wages and benefits than they have currently, and protects their job security and pensions. The offer tabled today by Canada Post demonstrates that the company is serious about reaching a negotiated settlement to this round of collective bargaining. Specifically, Canada Post’s offer provides:
 
• Annual wage increases
• The continuation of an annual cash bonus tied to the company’s performance
• Job security
• No changes to a Defined Benefit pension plan enjoyed by current regular employees
• Comprehensive benefits for employees and retirees
• A new sick leave program that provides equal coverage to all employees
• Generous vacation leave
 
For employees hired in the future, Canada Post has proposed a comprehensive and industry leading pay and benefits package that includes a new starting wage rate, a Defined Benefit pension plan, job security, up to six weeks annual vacation leave, and post-retirement benefits. In addition, the company has proposed making current and future CUPW employees part of the same sick leave program that has been implemented for other bargaining agents as well as management and executives.
 
It remains business as usual across our network as talks continue. Customers and the public will be notified immediately if the labour situation at Canada Post changes, or if CUPW provides 72-hour notice of its intention to begin strike activities. Please note that labour negotiations between Canada Post and CUPW will continue even if the union gives notice of their intention to start strike activities. 
 
Customers can find current information about the labour situation at Canada Post and register to receive updates by email or text online at www.infopost.ca/customer.