8 Tips for William Kaplan, the Independent Commissioner, Named to Identify Canada Post’s “Way Forward”

By Frank Cianciullo and Martin Sarch

Canada Post is facing significant financial challenges.

Canada Post has incurred a loss of $3 billion over the past six years, with further losses projected for 2024. The month-long strike at the end of 2024 could not have occurred more inconveniently. In logistics, November and December are typically the peak revenue months.

In previous years, this period marked the time when Canada Post began to turn a profit. As a result of the strike, substantial losses are anticipated for 2024.

Canada Post and the federal government are examining whether Canada Post can survive.

The strike was suspended on December 13, 2024. Labour Minister Steven MacKinnon decided not to send?the strike matter to “binding arbitration”—as the government did in the disputes with the railways and ports.

Labour Minister Steven MacKinnon announced that:

1.???? He asked the Canadian Industrial Relations Board to examine the issues. If the board determines that a deal can’t be reached by the end of the year, it would order the nearly 55,000 workers back to work (a time-out) under?their current contract?until May 22, 2025. He also said that this doesn't guarantee a deal will be reached by May.

2.???? MacKinnon also appointed labour negotiator, veteran arbitrator, and former University of Ottawa law professor William Kaplan to the role of independent commissioner. ?Kaplan will examine the corporation's structure, collective agreement, and bargaining issues and then produce recommendations ‘on the way forward’, from both the customer and business viewpoint.

The union, CUPW, issued a statement denouncing MacKinnon's move as an "assault on their constitutionally protected right to bargain collectively and to strike." Canada Post said it was reviewing the details?to ensure that CPC was prepared to participate fully in the process and comply with the minister's directive.

The question is - In May 2025, will the CUPW regain its right to strike?

However, the labour issues are intertwined with the actions that the CPC must undertake to survive, because the whole delivery industry has changed. You can’t just arbitrate the negotiation issues and put a band-aid on only the labour issues and hope that it will hold the organization together until the next round of negotiations.

Here are 7 tips for Mr. Kaplan.

The CPC organization needs a dramatically new “Master Plan”.

The organization needs to develop a forward-looking plan that balances immediate savings with long-term sustainability while addressing labour issues, operational inefficiencies, and changing customer needs.

The government should avoid restricting Canada Post and allow it to pursue measures to facilitate necessary change.

Canada Post must save hundreds of millions, and no single action will accomplish this.

8 Tips for William Kaplan to Identify Canada Post’s “Way Forward”.

1. Immediate Cost-Saving Measures

The Government of Canada has loaned Canada Post $1B to allow it to manage through the next short period. This loan is repayable, so without a clear, strong, and supported plan, this is only a temporary reprieve. Salaries and benefits account for over $3B per year, so without significant streamlining, losses will continue to accumulate.

• Optimize the organizational structure. Canada Post needs a head office, but does it really need large regional offices with duplicate directors and managers? The industry has changed. Canada Post states that letter mail volume has dropped by over 50% since 2006. We all need to do more with fewer people—flatten the organization.
• Optimize delivery frequency: To reduce labour and fuel costs, transition to twice-a-week letter mail delivery while maintaining daily parcel services.
• Implement standardized delivery for all non-business customers. Community mailboxes are efficient and economical and have been implemented in large parts of the country. Daily delivery to the house, still done in cities, is no longer financially viable.
• Streamline operations: Consolidate underused facilities, sell off real estate, invest in modern technology to optimize delivery routes, and reduce administrative overhead.
• Franchise retail operation: wherever possible, closing corporate outlets.
• Modernize / Digitize the infrastructure: Invest in smart sorting centers, integrated logistics networks, and real-time tracking technologies. This will minimize manual labour costs.
• Stop hiring multi-million-dollar consultants: if the right people do not exist to do the job, hire them.
• Spend energy on things that have real impact: Canada Post just raised letter rates by 25%. While this makes it look like CPC management is doing something, this will impact very few, as many consumers were already forced to move to online invoices and statements, due to the recent strike. The “harvesting” strategy is only good if there is something to harvest.

2. Government Support and Accountability

• Get short-term financial assistance: Provide interim, government funding for performance milestones, revenue generation and cost-reduction goals.
• Reform the legislation: Amend legislation to give Canada Post greater flexibility in pricing, service offerings, and partnerships.
• If the Government does not support the Post Office: then the only viable option is to shed costs as quickly as possible and wind down much of the operations.

3. Revenue Diversification

• Expand e-commerce services: Think of it as backward integration (a bakery buying a wheat processor or a wheat farm, therefore hindering competition. In this case, a Post works much more closely with e-retailers to block the competition by creating a close strategic partnership and controlling its raw material supply and production (the parcels). Partner with businesses to become the preferred logistics provider for Canadian e-retailers, offering competitive pricing and solutions that are tailored to each, specific, business customer. Helping them succeed means more parcel business for CPC. Just giving them rates is no longer enough. You need to hire commercial sales people that are interested in knowing their business and in helping them to grow their business….not just signing them up to a shipping rate. Moreover, they need to develop a culture that enhances the customer delivery experience. Canada Post is the face of the e-retailer.
• Reengineer the rural and remote Post Office: There are unrealized opportunities in this area. Don’t believe the myth that it’s all cost. Relocate post offices to where it makes sense. Offer financial services like savings accounts, loans, and bill payments, particularly in underserved communities. Offer Government services (this will require the Government to actually support rural Canada). Promote / sell solar products by driving electric vehicles, offer solar-charging station. Provide e-retailing services and packaging for small businesses. Promote food security. Promote health wellness. Sell fast-moving-consumer-goods.

4. Public-Private Partnerships

• Collaborate with private courier companies: to share infrastructure (e.g., open up postal franchises and community mailboxes) and reduce costs. Deliver last mile.
• Outsource: certain non-core operations to private entities while maintaining core services under public control. Do not give away your business; the partnership must work for all parties. Too often, Canada Post takes all the risk and absorbs most of the cost with minimal benefit. Pilots are run in a few Post Offices with minimal support and little chance of success.

5. Labor Relations and Workforce Optimization

• Move the organization to collaborative negotiations: The situation is serious. It’s time to change the approach. Moving away from years of competitive negotiation (which is more win-lose) and toward collaborative negotiation,?both parties are working together, exploring interests and developing alternatives in working towards a solution. Engage with unions openly to balance fair wages and sustainable labour costs. This is likely impossible with the current people, as CPC and its unions have been at each other's throats for years. The saying is that you get the union relationship that you deserve.
• Up-skill and Retrain: Equip employees with skills for modern postal and customer-experience-oriented and logistics operations, ensuring workforce adaptability. This will require extensive government support and money.

6. Technology and Sustainability Investments

• Electrify Fleet: Transition to electric vehicles to reduce operating costs and align with environmental goals.
• Enhance Digital Infrastructure: Develop user-friendly apps and online platforms for seamless parcel tracking, scheduling and payments.
• Promote sustainable packaging solutions: build relationships with e-retailers. Innovate. Get ahead of the curve. Introduce eco-friendly packaging options to attract environmentally conscious businesses and consumers.

7. Structural and Service Redesign

• Focus fully on Parcel Services: The industry and the market has changed dramatically. It’s not your grandfather’s post office anymore. Shift emphasis from declining letter mail to growing parcel delivery driven by consumers who want a great e-commerce customer experience.
• Engage in regional customization: Tailor services to meet specific regional demands, focusing on rural and remote areas.

8. Long-Term Vision and Regional Integration

• Engage in cross-Border Trade: Enhance international shipping solutions to support Canadian businesses in accessing global markets.
• Collaborate: Partner with other postal services to improve efficiency and competitiveness.

Conclusion

Canada Post faces a pivotal moment.

Immediate cost-saving measures, government support, and bold strategic changes can pave the way for a sustainable future.

Canada Post can transform from a struggling institution into a resilient and competitive service provider by embracing innovation, diversifying its revenue streams, and focusing on customer needs.

The time for action is now. 2025 must be the year Canada Post re-invents itself and sets a course for recovery and long-term success.

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Frank Cianciullo and Martin Sarch are postal specialists. Each of them has some 30 years of experience, working at Canada Post. They have spent the last 10 years working with the UPU, CARICOM, the Caribbean Postal Union and the postmasters of Caribbean Posts to “Dream Big Dreams” by reflecting, reimagining and resetting their post offices to address the current and real needs of their specific citizens.

Currently, they examine the impact of future scenarios on the Delivery Economy.

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