The possibility of mail delivery disruption on Friday this week loomed large after Canada Post issued a 72-hour lockout notice union workers.

Citing the union’s strike mandate, declining mail volume and that negotiations with the union have been dragging too long, Canada Post issued a statement early Tuesday morning announcing that it intends to suspend its current collective agreement with the workers by Friday.

Canada Post, however, said that a lockout would not mean it will not be operating on Friday but it would provide the Crown corporation “to take measures that are necessary to respond to the changing business reality.”

“As of Friday, July 8, 2016, the terms and conditions of the current collective agreements will no longer apply,” the statement said. “Under the new terms and conditions, employees will continue to receive their regular pay and some benefits such as applicable prescription drug coverage.”

It said other items will also be cancelled “in line with the statutory minimum conditions established under the Canada Labour Code Other” and that Canada Post may adjust staffing to meet workload.

In the case of a work disruption, mail and parcels will not be delivered, and no new items will be accepted.

Old Age Security, Canada Pension Plan, Working Income Tax Benefit and Canada Child Benefit cheques are considered essential mail and will continue to be delivered. “In the event of a work disruption, we would arrange … delivery one day of the month,” according to Canada Post spokesman Jon Hamilton.

The Crown corporation said that its business has been suffering because customers have been taking steps to work disruption:

  • 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 per cent from these customers.
  • 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.
  • Letter mail 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.

“We knew this was their game all along,” Mike Palecek, president of the Canadian Union of Postal Worker (CUPW), said in a statement. “They are sabotaging the public review of the post office. They refused to negotiate fairly with us and now they ‘re locking the doors and will try to starve us into submission.”

He said the union has been attempting to negotiate pay equity for its female-dominated workforce of rural carriers and stave off the profitable Canada Post’s demands for massive rollbacks.

“Canada Post has tabled just one offer since negotiations began and is now shutting down Canadians’ postal service across the country,” CUPW said.

Negotiations are stuck on the issue of changes to employee pensions plans.

Current union members have a defined benefit plan which but guarantees a fixed benefit regardless of investment returns.

Canada Post’s offer, made on June 25 this year, proposes to provide new hires with a defined contribution plan which is less costly but does not provide guaranteed payouts.

According to Canada Post, the union’s demands are “not affordable” and would cost an additional $1 billion to the life of a new contract. The corporation said it has informed CUPW that its offer presented on June 25 “are considered final, as they represent a fair and reasonable framework for settlements.”

CUPW disputes Canada Post’s figures.

The corporation’s pension plan posted an annual surplus of $1.2 billion last year, but has a solvency deficit of almost $6 billion, according to the fund’s annual report.