Why Canada’s Christmas presents may not be delivered on time this year
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As one of the busiest shopping weekends of the year kicks off, many Canadians are facing the reality that Black Friday deals may not arrive before Christmas. A strike at Canada Post, now two weeks in, has caused significant delays in shipping, leading to losses for many businesses, especially small ones that rely on timely deliveries.
The strike, involving the Canadian Union of Postal Workers (CUPW), has already caused severe financial hardship. Lorne James, the owner of Otter Valley Railway, a model train business in Ontario, estimates he has lost C$120,000 ($85,600) in sales since the walkout began. James, whose business is heavily dependent on online sales, says about 80% of his orders come through the mail, and Canada Post has long been his primary delivery service. “It’s going to wipe out a good number of businesses,” he warned.
The strike comes at a crucial time for many businesses, as the holiday season is vital for annual revenue. Bruce Winder, a Canadian retail analyst, explained that for many retailers, especially those selling giftable items, Christmas sales typically account for 30-40% of their yearly income. With Canadians already expected to spend less due to rising living costs, the strike adds further complications. “It’s a double whammy,” Winder said, pointing out that the strike and the overall negative consumer sentiment are especially damaging.
While some businesses, like James’s, have been able to negotiate contracts with other delivery services, shipping internationally through other carriers can be prohibitively expensive. This has led to lost sales, particularly for orders outside of Canada.
Shopify, a company that helps businesses build online stores, issued an open letter urging the government to intervene in the strike, warning that prolonged disruption could deal a devastating blow to small businesses. The company’s plea came after a federally appointed mediator suspended talks between Canada Post and the CUPW, saying the two sides were too far apart on key issues.
At the heart of the dispute are issues like inflation-driven pay raises, benefits, and the hiring of temporary workers to expand delivery to seven days a week. Canada Post insists that it needs greater flexibility to remain competitive and to adapt to changing market conditions, especially with the rise of online shopping. However, the CUPW argues that Canada Post’s plan to rely on gig workers and temporary labor is harmful to its workforce and to Canadians.
The Canadian government, which owns Canada Post, is facing pressure to act. Public policy expert Ian Lee from Carleton University likened the situation to the downfall of Blockbuster Video, warning that Canada Post’s future is at risk unless significant changes are made. “It’s Armageddon,” Lee said, stressing that the postal service must adapt or face obsolescence.
Canada Post, a for-profit crown corporation, posted a C$749 million loss in the 2023 fiscal year. Traditionally known for letter delivery, its mail volume has plummeted from 5.5 billion items in 2006 to just 2.3 billion in 2022, largely due to digital communication. While parcel delivery has surged with the boom in online shopping, Canada Post faces tough competition from private couriers, particularly Amazon, which handles its own deliveries.
The situation is further complicated by the decision of the United States Postal Service (USPS) to halt mail deliveries to Canada because of the strike. Canada Post itself has reported a loss of 10 million parcels since the walkout began, a blow to both the company’s finances and its reputation.
Some businesses are reconsidering their future partnerships with Canada Post due to the strike. John Barrett, director of sales and marketing for Vesey’s Seeds, Canada’s largest mail-order garden company, shared that 250,000 seed catalogues are sitting in a warehouse, unable to be delivered. As a result, the company faces increased storage costs and missed sales opportunities.
While the Canadian government has not yet intervened directly in the strike, it has signaled that the situation is a critical juncture for Canada Post. Labour Minister Steven MacKinnon emphasized that a resolution must come from the union and the company, not from government intervention. However, many businesses, like Barrett’s, feel the government’s lack of action is exacerbating the problem.
“It’s time for government to act,” Barrett said, criticizing the ongoing deadlock. With the holiday season rapidly approaching, the lack of a resolution is leaving many businesses uncertain about their future and their ability to deliver on time. The outcome of this strike will determine not only Canada Post’s future but also the survival of many small businesses across the country.
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