Jobs Minister Patty Hajdu on Wednesday called on Canada Post and the union representing 55,000 postal workers to return to the bargaining table and hash out terms for binding arbitration, with the two sides still far apart on key issues.
In a social media statement Wednesday, the minister also asked the Crown corporation and the Canadian Union of Postal Workers to continue to work toward a deal outside of that process.
Binding arbitration, where a third party decides the terms of the collective agreement, is "not the preferred path," she said, but suggested the stage would be set for an imposed settlement if the two sides could not find common ground themselves.
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"Canadians expect the parties to resolve this dispute one way or another. To do that they must meet and pursue these two paths with urgency," Hajdu said on X, formerly known as Twitter.
Federal mediators are standing by to help, she added.
Canada Post said Wednesday it is ready to go back to the table to negotiate a new collective agreement.
"After 18 months at an impasse, all options must be considered to address these critical priorities, including an employee directed vote," said spokeswoman Lisa Liu in an emailed statement Wednesday.
Canada Post asked the minister last week to force a union vote on its "final offers." The union came back by proposing binding arbitration.
Each side rejected the other's suggestion: Union president Jan Simpson decried any compelled vote as a "government attack on our rights to free collective bargaining;" Canada Post warned that arbitration would be "long and complicated" — more than a year, it claimed — adding to its financial problems.
The minister made no mention Wednesday of a vote, after saying last week she was "reviewing" Canada Post's request.
Hajdu's two-pronged approach — ushering the parties toward possible arbitration as well as a voluntary deal — may be an attempt to pry an agreement out of them by using the stick of intervention.
"Knowing that the minister is saying that intervention may be coming, will they be able to negotiate something and take it out of the hands of an arbitrator that potentially could give everything to one side or the other?" asked Stephanie Ross, an associate professor in the School of Labour Studies at McMaster University, stressing that "arbitration is always a bit risky."
And if not, will the two sides will even be able hammer out terms for arbitration — to agree on what issues an arbitrator would rule on — she wondered.
"This is just another level of the impasse."
On Tuesday, the union said the minister had laid down a next-day deadline to respond to the employer's latest offers, which include an end to compulsory overtime and a signing bonus of up to $1,000, among other concessions.
But management stuck to its proposal for a 14 per cent cumulative wage hike over four years, a "dynamic routing" pilot that could see mail carriers' routes change daily in response to parcel volume, and part-time staff on weekend shifts — a major sticking point in the talks.
Meanwhile, the Crown corporation's income statement continues to bleed.
It reported nearly $1.3 billion in operating losses last year, raising further questions about its business model as letter volumes plunge and fears of a second disruption in six months persist.
The union again adopted a legal strike position starting May 23, but it has opted instead to ban members from working overtime while negotiations continued.
The 32-day work stoppage in November and December halted millions of letters and packages in the peak shipping season ahead of the winter holidays last year.
Canada Post says parcel volumes are down 65 per cent from the same time last year due to uncertainty over the contract negotiations.
Typically, unions seek negotiated deals rather than arbitration, Ross noted. But in this case, postal workers may see the latter as a gambit to avoid overhauls to an organization in crisis — particularly after a commissioner's report recommended major reforms to the 158-year-old institution.
"Arbitrators tend to be reluctant to make big structural changes to the employment relationship, because it's much more preferable that the parties agree," Ross said.
"The union feels this would be a good way to defend their current employment structure and defend against the rollout of part-time on the weekends."
This report by The Canadian Press was first published June 4, 2025.
