Canada Post and its largest postal workers’ union have agreed on tentative five-year collective bargaining agreements for the courier’s urban unit and its rural and suburban mail carriers.
The tentative deals cover roughly 55,000 of the postal service’s 62,000 employees, represented by the Canadian Union of Postal Workers (CUPW).
In November, the parties originally agreed to a deal in principle, which ended weeks of rotating strikes. But the language of the tentative contracts had not been agreed upon and the union said it would retain the right to strike again in the event of further disagreements.
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With the tentative deal now in place, the union now moves to the agreement ratification process, with both parties agreeing not to engage in any strike or lockout activity.
The union will be managing a ratification vote for CUPW-represented employees in 2026, but has not set a date.
The tentative deals will expire Jan. 31, 2029, and introduce regular weekend parcel delivery and include higher wage increases. The first year will start with a 6.5 percent wage increase followed by a 3 percent hike in the second year. In years three through five, wage hikes will instead match Canada’s annual inflation rate.
Over a two-year stretch, both Canada Post and the union have sparred over wages and structural changes to the postal service’s workforce, including proposals to introduce more part-time workers to power weekend delivery.
Although the union had fought against the delivery expansion and a shift to part-timers, Canada Post had long argued that it needed to establish a weekend parcel service to better compete with rivals.
While the courier’s share of parcels delivered nationwide dropped from 62 percent in 2019 to below 24 percent in 2024, the on-and-off labor disruptions since last year’s month-long holiday season strike further accelerated that shift.
In November, the company said third quarter parcel volumes declined 42.5 percent from the year prior.
Under the tentative agreements, Canada Post will introduce new part-time and flex roles to support weekend parcel delivery without restructuring existing full-time routes. In the urban unit, a new Parcel Delivery Part-Time classification will handle mostly weekend parcel volumes, with a guaranteed minimum of 15 hours per week.
In the rural/suburban unit, current permanent relief employees will be converted into permanent flex employees, guaranteed a baseline of 20 hours per week. They will be primarily used to cover absences, but could also be available for Saturday and Sunday delivery when needed.
The union did get a win in repelling Canada Post’s attempt to implement dynamic routing in the urban unit and load leveling across both segments. Under the latter, supervisors would reassign pickups and deliveries before carriers started their routes to ensure more balanced, consistent daily assignments.
For the CUPW, both positions were considered attacks on worker seniority rights, with the union alleging the terms gave supervisors too much power to reassign work.
The recent months of contract negotiations coincided with Canada Post’s government-recommended modernization plan, with the courier taking steps to end door-to-door delivery for 4 million addresses. Those addresses would be converted to community mailboxes, which would save nearly $300 million annually.
The company has said it is financially insolvent, with cumulative operating losses exceeding $4 billion since 2018. The Canadian Crown corporation, like its counterpart in the United States, has bled cash over the years due to the added parcel competition and declining mail volumes.
In 2006, Canada Post mailed 5.5 billion letters. That number fell to 2 billion last year.
Canada Post is coming off the biggest money-losing quarter in its history, with the delivery company incurring a pre-tax loss of $394.5 million in the third quarter.
In the first nine months of 2025, the courier has recorded operating losses of $760 million.
With the deals, the union was able to retain lifetime job security for permanent urban employees, protecting them from layoffs. Rural and suburban employees will get enhanced protections, although neither Canada Post or the CUPW elaborated on details.
At the courier’s annual meeting last month, CEO Doug Ettinger said natural attrition would drive job cuts at the Post in upcoming years.
Ettinger anticipates more than 16,000 employees will either retire from or leave the corporation by 2030. By 2035, another 14,000 are expected to exit.
“Going forward, we will need to be a leaner organization,” said Ettinger. “Between retirements and other approaches such as voluntary departures, we can navigate this change with respect for our employees.”
No changes were made to pension for either unit.
