Canada's postal service reported a loss of $242 million for the second quarter of this year, a sharp decline from a $27-million profit earned during the same period of 2017.
Canada Post blamed the loss on the costs associated with settling a pay equity dispute with its biggest union, the Canadian Union of Postal Workers (CUPW). However, the company said in a statement that it may be able to revise the quarterly loss depending on the outcome of talks underway with CUPW aimed at reaching a mutually beneficial pay equity resolution.
"A mediation process is under way to reach a negotiated settlement," the Crown agency noted in a statement posted on its website. "Once the process is completed, the Corporation will be in a position to disclose the financial impact of the settlement, which may differ significantly from the estimates recognized in this quarter."
Canada Post and CUPW are also currently in negotiations for a new collective agreement. The previous one lapsed in December 2017 and the union has asked its members to vote on job action by September 9.
Canada Post also reported Tuesday that it suffered an overall, before-tax loss in the first half of 2018 of $172 million, compared with a profit of $77 million for the same period last year. The postal company said the losses came despite a nearly 20% increase in second quarter parcel revenues over the same three-month segment in 2017. The carrier's parcel service has been growing steadily over the past few years, thanks to the popularity of online shopping.
Some industry observers have predicted parcel revenues could grow even further, especially if talks to update the North American Free Trade Agreement result in an increase in the amount of goods Canadians can have shipped from the United States without having to pay duties.
In a tentative deal announced Monday, the U.S. said Mexico agreed to double its duty-free level from $50 U.S. to $100 U.S. Canada's duty-free level currently stands at $20 while the United States allows its consumers to buy $800 U.S. worth of goods online before duties are applied — a discrepancy that has upset United States government officials.
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