Opines Archives - Page 5 of 8 - Canada's Modern Post

Michael Warren’s Call for Privatization

Michael Warren, a former CEO of Canada Post from 1981-1985, has been a protagonist of Canada Post’s modernization program since its inception.

The release of Canada Post’s 2011 Annual Report gives him more fuel for his fire.

In his Wednesday, May 9th, Toronto Star article titled, “Canada Post a growing burden” Mr. Warren builds a credible premise on the escalating financial problems that Canada Post has, though a number of his figures are not correct or substantiated. For example he stated that Canada Post lost $253 million last year. This is not correct. The Canada Post segment (which excludes Purolator profits) lost $327 million.

Then he went on to describe that Canada Post lost $220 million from the strike which is not substantiated. Canada Post has not yet officially disclosed any figures. Warren’s numbers are likely a simple math calculation made from Canada Post’s yearly revenue, broken down into revenue generated every week, which runs around $111 million. The lockout/strike was two weeks. He simply did $111 million x 2 and rounded off or something similar. This does not take into account permanently lost business due to the strike.

He cites company mismanagement has cost the company, using the Supreme Court award 0f “$150 million in a pay-equity dispute that management should have settled years ago,” as a prime example. This dispute began in 1983 while he was still president of Canada Post. His article does not address this aspect at all or defend why he didn’t do anything.(1)

Mr. Warren’s solution is that Canada Post should be privatized.

However, he recognizes the current financial problems at Canada Post is the largest barrier: “Stephen Harper may be avoiding privatization because it means contributing billions to CPC’s underfunded pension fund to make any sale attractive. Doing nothing is also a way of keeping Canada Post’s growing liabilities at arm’s length. “

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(1) Thank you Postie Paul for this insightful comment at the bottom of this Toronto Star article.

Is Canada Post following in the Footsteps of UPS?

A February 17, 2012 Toronto Star interview with Deepak Chopra, CEO of Canada Post, reveals insights into the future of Canada Post, and it is markedly different from the company’s past.

Deepak’s vision demonstrates a blueprint that can be found in a pattern already established by the multinational-logistics- and delivery company, the United Parcel Service (UPS). UPS has the largest worldwide package delivery network.

Staffing Shortages and Forced Overtime at Canada Post

The meaning behind staffing shortages and forced overtime at Canada Post.

The present collective agreement between Canada Post and the Canadian Union of Postal Workers has a clause that allows Canada Post to force its letter carriers to do overtime in order to cover routes that are vacant due to illness, disability, vacation or other staff shortages.

The Federal Government, Canada Post and Final Arbitration

Did the Canadian Federal Government steal from the U.S. Government’s playbook to resolve the Canada Post labour dispute?

A further look demonstrates final arbitration was wholly adopted by the Canadian Government from the United States in resolving the labour dispute between Canada Post and its CUPW represented employees when it passed legislation on June 26, 2011 entitled: Restoring Mail Delivery for Canadians Act.

The U.S. Government since 2003 has been trying to enact final arbitration legislation but has not succeeded. But it did happen in Canada, which historically is a more socialist country, and takes a more restrained approach in labour relations. This was a substantial shift from traditional Canadian Government intervention.

Here is a brief history of this development in the United States.

The 2003 presidential commission on the USPS promoted an amendment to the legislation on the United States Postal System by which final arbitration would be standard procedure. They found arbitrators tended to side with employees too often in arbitration rulings. Therefore the solution would be to force arbitrators to consider the financial condition of the USPS in its collective bargaining decisions.(1)

This recommendation by the presidential commission was never enacted.

In 2009, a similar bill was introduced by Senate Committee on Homeland Security and Governmental Affairs. It was multifaceted and included, “to require arbitrators in rendering collective bargaining decisions to “consider the financial condition of the Postal Service.””(2)

More recently the U.S. Government Accountability Office also echoed the same clause should be added in any revision:

“facilitating USPS cost reduction, such as by modernizing and optimizing postal networks and its workforce; modifying its retiree health benefit cost structure in a fiscally responsible manner; and requiring any binding arbitration in the negotiation process for USPS labor contracts to take USPS’s financial condition into account.”(3)

In that same year, Republican Senators Tom Coburn, and Susan Collins tried to amend with their own Senate Bills that had the same wording.(4)

More recently Sen. Tom Capers (D-Del.) introduced an omnibus bill in May, 2011 in the United States. His press release outlined many goals outside of this writing, but in reference to wages and final arbitration, it stated:

“At times, arbitrators have awarded postal employees what they believe are comparable pay and benefits without taking the Postal Service’s financial condition into account. Recognizing that this situation cannot continue in a world where the Postal Service operates under a rate cap and faces stiffer competition from electronic communication, the bill requires arbitrators to take the Postal Service’s financial condition into account along with other factors such as the comparability requirement and the details of the rate system.”(5)

None of these amendments have passed so far.

In June, 2011, labour relations between Canada Post and its main union came to an impasse. In order to resolve the stalement and get the mail running again, the Conservative Government decided to pass legislation that forced final arbitration and a fixed wage schedule. The final arbitration has never been used in Canadian back-to-work legislation before.

It reads very similar to the U.S. motions tabled over the years. In reference to final offer arbitration it reads:

“(2) In making the selection of a final offer, the arbitrator is to be guided by the need for terms and conditions of employment that are consistent with those in comparable postal industries and that will provide the necessary degree of flexibility to ensure the short- and long-term economic viability and competitiveness of the Canada Post Corporation, maintain the health and safety of its workers and ensure the sustainability of its pension plan…”(6)

This final arbitration process enacted by the Canadian Government was a well-researched one that took considerable time to develop. It definitely was not a knee-jerk reaction or quickly put together. It was planned months ahead for the inevitable negotiations to break down and be implemented. It always appeared to be a made-in-Canada solution, but it is of foreign origin.

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(1) http://assets.opencrs.com/rpts/R41024_20100317.pdf
The U.S. Postal Service’s Financial Condition: Overview and Issues for Congress. Kevin R. Kosar. Analyst in American National Government. March 17, 2010. Pg. 12
(2) http://www.henrywaxman.house.gov/UploadedFiles/Postal_Reform.pdf The U.S. Postal Service’s Finances and Financial Condition. Kevin R. Kosar. Analyst in American National Government. September 17, 2009. Pg. 8
(3) http://www.gao.gov/highrisk/risks/efficiency-effectiveness/restructuring_postal.php
(4) http://ruralinfo.net/ruralmailtalk.html#nabble-td3347534
(5) http://www.postalreporternews.net/2011/05/17/sen-carper-introduces-comprehensive-postal-service-act-2/
(6) http://laws-lois.justice.gc.ca/eng/acts/R-7.2/page-1.html#docCont

Article updated 11/03/2012

Stats on Declining Volumes

Here are the statistics on volume counts derived from Canada Post’s Annual Reports from 2001-2009:

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CPVolume 3 — Direct Marketing Mail volumes

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The “Volume (In Millions)” category highlighted in brown is taken directly from the Canada Post Annual Reports.(1) This data was entered into an Excel spreadsheet program where “Volume Change” and “Percentage” columns were added independent from any Canada Post official literature.

The Annual Reports prior to 2003 were not plainly demonstrated. To achieve these figures in 2001 and 2002, some creativity was required to conclude. It is possible these numbers may be off. Anything from 2003 and later are considered de-facto.

The results in 2009 appear very concerning.

(1) Thanks, once again, to Mark Grossman, a letter-carrier at Canada Post, for his hard work over many years to report, collate and analyze this data. This record here is based on his work.