I am writing to you today as I reflect on the holiday season, the year we have had, and Canada Post’s future moving forward.
Over the first part of the year, we saw the Corporation continue its success in the parcel business, with volumes growing approximately 24% over the previous year. While letter mail continued to decline, Neighbourhood Mail revenues held strong, and our service earned us new customers in both our Parcels and Direct Marketing lines of business.
Alongside these huge successes, we continued to work through challenges as we adapt our business from structures that were built to deliver letter mail. We need to expand our network capacity and improve our IT systems to provide customer service that is competitive with other parcel carriers. We need to redesign our rural and urban route measurement systems so they are more accurate and support balanced workloads. And most importantly, we need to identify and address key safety issues to reduce our injury rates.
Also in 2018, important closure was reached on the key issue of pay equity with the arbitration ruling in September. As I have said before, equality on the basis of gender is a key human right and this ruling is of fundamental importance to how we pay RSMCs. Implementation is occurring as quickly as possible through a joint committee. RSMCs will see their pay increases from the ruling in January 2019. Full reconciliation and payment will occur by fall 2019, retroactive to January 2016, in accordance with the ruling and the agreements reached by the parties.
We have had a difficult year working through all of these issues. While we were on a positive financial path in the first half of the year, we have since lost a significant part of our customer base, and parcel volumes didn’t continue to increase as projected. Instead, parcel volumes over the holiday period have been lower than last year. Tremendous work has occurred across the company to get caught up from the backlogs, and I want to thank everyone for their contributions to this effort.
As we look ahead to 2019, I find myself reflecting on my first year with Canada Post. It is clear to me that this great company has a strong future serving Canadians. But to succeed, we need to find new ways of working together, listening to each other and being open to new solutions. I am committed to helping to find this path forward. While the CUPW collective agreement process is now moving to arbitration, starting in January, there is still much work to do to redesign our future together.
Sometimes, we just need a little help from each other to find our way on this path. Over the past few weeks, a number of people emailed me about the impact that the new terms and conditions had on them. As you know, with the withdrawal of work, whether through work stoppages or the overtime ban or other measures, the collective agreements ceased to apply and terms and conditions of employment defaulted to the Canada Labour Code. We made a number of special exceptions to this, like continuing prescription medication coverage, and creating a compassionate clause where individuals could continue to receive benefits in extenuating circumstances. One implication of the strikes was that benefits like vacation and personal days stopped accruing.
I have reviewed the issue of accrual of vacation and personal days. While this will not set a precedent for terms and conditions in any future work disruptions, I have made a decision to reinstate these days for everyone. I believe we all want to see a future for Canada Post where we have the potential to reset our relationship and work collaboratively on the important issues that need to be solved to be successful competing as a parcel delivery company. I hope making this change will help create an environment where we can talk, listen and work together on our future.
I wish you all the best for a happy and healthy holiday season.
Chair of the Board of Directors and Interim President and CEO