Canada Post work stoppage: What are the negotiations about anyway?

EDITOR’S NOTE: This is an updated story to reflect Canada Post issuing a lockout notice to CUPW.

After months of tense negotiations, Canada Post has issued a 72-hour lockout notice to the Canadian Union of Postal Workers (CUPW), which could result in a work stoppage by Friday.

WATCH: Postal workers committed to collective bargaining negotiations

The Crown corporation said it plans to suspend the collective agreement as of Friday, blaming the ongoing negotiations, CUPW’s strike mandate and the financial cost of a rapid decline in mail volume.

Here is a look at what is holding up the contract talks.

Canada Post and union negotiating pensions 

Changes to employee pension plans have been at the heart of the negotiations.

The crown corporation wants to switch new employees to a defined contribution plan, instead of the defined benefit plan for current employees that guarantees a set level of retirement benefits.

READ MORE: What you need to know if service stops

Canada Post said it has tabled an offer which includes “modest and manageable wage increases for all employees and no changes to the pension for all employees in the plan,” but “required a new pension approach for new hires.”

WATCH: Postal workers union claims Canada Post profits to exceed $100M

Canada Post said in written statement released Monday they were “extremely disappointed” with CUPW’s response to the tabled offers which they say would add “at least $1 billion” in costs over the next three years.

WATCH: Small businesses fear higher costs as Canada Post work stoppage looms

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Jon Hamilton, a spokesman for the postal service, said Canada Post has felt the pinch from competing couriers and the growth of online payments and flyers.

“The amount of mail, the amount of advertising mail, the number of parcels are already declining,” Hamilton told the Canadian Press. “Many of our customers have already put contingency plans in place months ago and have been moving away from Canada Post.”

What does CUPW think?

The union has rejected changes to pensions but has also proposed wage hikes.

CUPW said in a statement Saturday the offer presented by Canada Post was “an insult.”

READ MORE: Some benefit cheques will still be delivered

The union is also fighting against what it describes as a two-tier pay scale for urban and rural mail carriers.

“Canada Post is asking us to sell out our future coworkers by agreeing to a two-tier system for doing the same work,” Union president Mike Palecek said last week. “That’s unacceptable to us.”

When was the last labour disruption?

The last time there was a work stoppage at Canada Post was in 2011. After eight months of collective bargaining negotiations, CUPW began a series of rotating strikes, which was followed by a nationwide lockout.

WATCH: ‘Canada Post needs to follow the law and pay women equally’

The former Conservative government introduced back-to-work legislation ending the labour disruption.

The union has said it does not expect the Liberal government to get involved this time around.

*With files from the Tania Kohut and

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