Canada Post deal provides short-term relief for small business; fixes nothing

TORONTO, Aug. 31, 2016 /CNW/ - Averting a postal service disruption is a relief for Canada's small businesses, but the tentative deal between Canada Post and its largest union fails to address the fundamental problems affecting the corporation and its customers: unsustainable pensions that continue to push costs up.

Reaching a tentative agreement late last night, Canada Post and the Canadian Union of Postal Workers (CUPW) have ensured that mail delivery will continue. This is great news in the short-term for businesses as we move toward the holiday season, but the underlying problems that harm Canada Post's long-term financial health were left untouched.

"Small business wants a healthy, sustainable, national Canada Post Corporation. We are disappointed that the tentative deal ignores Canada Post's out of control pension costs," said Dan Kelly, Canadian Federation of Independent Business (CFIB) president. "Instead of compromising to ensure the long-term viability of Canada Post, the union has kept its head buried in the sand on the company's biggest problem, ensuring we'll be right back in this same position in two years' time."

Due to the summer-long uncertainty caused by the lengthy and contentious negotiations, many small businesses sought alternatives with online invoices and payments and private courier services. Once set-up, it is likely that some of this business will never return to Canada Post.

"The union has even suggested their unsustainable pension plan be exempt from pension solvency rules," added Kelly. "It's like calling up your bank and asking if they'd mind exempting you from your mortgage."

Many other government agencies continue to face similar pension problems. The defined benefit pensions still popular in the public sector are becoming increasingly unaffordable due to longer lifespans, lower investment returns and years of under-contributions. CFIB is urging governments to ensure that pension costs are reined in by moving new or recently hired employees to defined contribution pension plans.

CFIB is Canada's largest association of small- and medium-sized businesses with 109,000 members across every sector and region.

SOURCE Canadian Federation of Independent Business

To arrange an interview with Dan Kelly, please contact Kiara Morrissey at 416-222-8022, 647-464-2814 or [email protected].