Canada Post and the postal workers union say they have reached an “agreement in principle” that brings the parties a step closer toward a new contract and an end to years of labour uncertainty.
The Canadian Union of Postal Employees said Friday it will agree to pause strike action and enter final negotiations, while the national mail carrier will suspend any lockout activity in kind.
“This means both sides have agreed on the main points of the deals, but we need to agree on the contractual language that will form the collective agreements that would be put to a vote by the members,” the union’s national president Jan Simpson said in a statement.
“Should the tentative agreements not be reached because the parties disagree on how the agreement in principle is reflected in language provisions, the suspension will be lifted for both parties, and the union may continue strike activity.”
The statement added that CUPW “will retain the right to strike until new agreements are ratified.”
Canada Post confirmed the deal in principle but told Global News it would not comment further while the tentative agreements are finalized.
Fears had been mounting this month of another national strike to coincide with this year’s busy holiday shopping season, as news of an agreement appeared out of reach.
“This round of bargaining has been a challenging one,” Simpson said Friday. “But members have stood together for strong public services, good jobs and a sustainable post office.”
Negotiations on a new contract for Canada Post workers have dragged on for over two years and have seen two national strikes by the union, the last one taking place earlier this fall.
CUPW moved to rotating strike action last month as it continued to keep pressure on the company to return to the negotiating table. Mediated talks resumed on Oct. 30.
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Friday’s announcement of a deal came hours after Canada Post reported its worst-ever quarterly financial loss, which company leadership had previewed during its annual general meeting on Tuesday.
Canada Post says it has lost over $1 billion so far this year, including an “unprecedented” $541 million before taxes in its third quarter.
It said Friday that ongoing strike action by its 55,000 mail carriers had forced the company to burn through a federal government loan of $1.03 billion months earlier than expected in order to stay afloat.
The Crown corporation has cited its persistent financial struggles — driven mainly by declining letter mail business and stiff competition for parcel delivery — as reasons for not being able to meet the union’s demands for a new contract.
CUPW has been calling for higher wages and benefits to account for rising inflation and cost of living, and guarantees for full-time workers to be used for future weekend parcel delivery operations.
Canada Post’s most recent offer to the bargaining units proposed a 13 per cent cumulative wage increase over four years — six per cent lower than the union’s latest counter-offer.
Ottawa has sought to step in and save Canada Post by announcing reforms in September, including relaxed letter delivery standards and allowing the company to end door-to-door delivery for most individual addresses, moving instead to community mailboxes.
It will also allow Canada Post to close some post offices in areas once considered rural, but have since grown to become suburban or urban and may no longer need a dedicated postal centre.
“Given the current financial situation of Canada Post, the status quo and repeated bailouts by the federal government are not the solution,” Government Transformation, Public Works and Procurement Minister Joël Lightbound told a House of Commons committee last month while defending the changes.
Canada Post said Friday it will need another bailout by early 2026 in order to stay afloat.
The company has accepted the government’s reforms and delivered an action plan to the government on how to implement them, which is being reviewed. Canada Post and federal officials have said mail service in rural, remote and Indigenous communities will be protected under the changes, and customers with mobility issues can sign up for door delivery.
The company last month announced multiple layoffs under “corporate-wide restructuring efforts to better align our management team with the future needs of the organization,” which Ottawa had also called for.
Canada Post has said it will reduce its postal workforce as well, mostly through attrition, but has also proposed incentives for employees to take early retirements.
CUPW launched its latest strike in protest of the government’s mail service changes and has called for a public review of Canada Post’s operations.
The strike action came after the union imposed bans on overtime and delivering unaddressed mail such as business flyers.
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