The summer heat hasn’t cooled tensions between Canada Post and its workers, as negotiations remain gridlocked and businesses across the country brace for potential disruption. For Alicia Hardy, who ships handmade jewelry from her Etsy shop in Halifax to customers nationwide, the uncertainty is already affecting her bottom line.
“I’ve started warning customers about possible delays, and some are hesitating to place orders,” Hardy told me during a phone interview last week. “July is usually one of my strongest months, but sales are down about 30% compared to last year.”
Hardy isn’t alone. With the Canadian Union of Postal Workers (CUPW) in legal strike position since July 8, thousands of small businesses that rely on Canada Post for affordable shipping are scrambling to develop contingency plans – often at significant cost.
The timing couldn’t be worse. Many retail businesses are already preparing for the critical back-to-school season, while simultaneously navigating persistent inflation and rising interest rates that have squeezed consumer spending.
The Canadian Federation of Independent Business (CFIB) reports that 41% of small businesses depend heavily on Canada Post’s services. Dan Kelly, CFIB president, expressed concern about the economic ripple effects.
“Small businesses are still recovering from pandemic disruptions, and now face the prospect of shipping delays or significantly higher costs with alternative carriers,” Kelly explained. “For many operating on razor-thin margins, this creates genuine existential concern.”
The standoff centers primarily around wages, working conditions, and job security. CUPW is pushing for improved compensation to offset inflation, better protection against increasing parcel volumes, and guarantees against further automation-driven job losses. Canada Post, meanwhile, cites financial pressures including a $515 million loss in 2023 and changing mail patterns that have seen letter mail continue its steady decline.
While neither side appears ready to budge substantially, the federal government has notably avoided intervening with back-to-work legislation, preferring to let the collective bargaining process play out. Labour Minister Steven MacKinnon has urged both parties to reach a negotiated settlement, emphasizing the importance of Canada Post services to communities and businesses nationwide.
For online retailers like Brock Thompson, who runs a specialty food business in Saskatoon, the uncertainty requires difficult strategic decisions.
“We’re looking at using UPS and FedEx, but their rates are 30-40% higher than what we pay with Canada Post. We either have to eat those costs or pass them on to customers who are already price-sensitive due to grocery inflation,” Thompson said.
Thompson has temporarily increased inventory at Amazon fulfillment centers as one mitigation strategy, though this comes with its own costs and complexities.
The e-commerce boom during the pandemic made many small businesses more dependent on reliable, affordable shipping. Statistics Canada data shows online retail sales grew 75% between 2019 and 2023, with much of that growth coming from small and medium-sized businesses entering digital marketplaces for the first time.
Toronto-based retail consultant Eva Chen points out that larger businesses often have established relationships with multiple carriers and more negotiating power.
“Enterprises can pivot quickly because they have redundancies built into their logistics systems,” Chen explained. “Small businesses typically don’t have those options or relationships. They’ve built their pricing models around Canada Post’s rates.”
Some affected businesses are exploring creative solutions. Montreal-based bookseller Pierre Lacroix has organized a local delivery co-op with three other independent bookshops.
“We’re pooling resources to hire a part-time driver and coordinate neighborhood deliveries within the city,” Lacroix shared. “It’s more work logistically, but it preserves the customer experience and actually creates a nice community touch.”
For businesses in rural areas, alternative options are even more limited. Yellowknife-based Indigenous crafts retailer Sarah Drygeese faces particular challenges.
“Up here, Canada Post isn’t just convenient – it’s often the only affordable option to reach customers in southern Canada,” Drygeese said. “Private courier rates to ship out of the territories can be prohibitive.”
Logistics experts recommend businesses consider several strategies to minimize disruption. These include communicating transparently with customers about potential delays, temporarily adjusting shipping policies, exploring local delivery options where feasible, and potentially stockpiling essential shipping supplies.
Shopify, the e-commerce platform that hosts over 50,000 Canadian merchants, has published resources to help sellers navigate the uncertainty, including guidance on setting up alternative shipping carriers and managing customer expectations.
The broader economic impact remains difficult to quantify precisely, but economists suggest a prolonged disruption could have measurable effects. TD Bank economist Rishi Sondhi estimates that an extended Canada Post service interruption could shave up to 0.1% from monthly GDP figures, with impacts concentrated in retail and e-commerce sectors.
While Canada Post and union representatives continue negotiations with the help of federal mediators, businesses remain in limbo. The last major work stoppage at Canada Post in 2018 lasted 37 days before back-to-work legislation was implemented.
For now, small business owners like Hardy in Halifax are trying to remain adaptable while hoping for resolution.
“I built this business during the pandemic, so I’m no stranger to challenges,” she reflected. “But after everything small businesses have weathered these past few years, the uncertainty around something as fundamental as being able to ship products to customers feels especially tough.”
As the summer progresses, millions of Canadians sending and receiving everything from bill payments to online purchases are watching closely, hoping cooler heads will prevail in the heated labor dispute – and that small businesses won’t be left carrying the heaviest burden.
