Canada Post Strike Devastates Small Businesses Ahead of Peak Season

The Canada Post strike, which began on Friday, November 15th, has sent ripples of anxiety through the nation's small businesses as the crucial holiday shopping season kicks off. With 55,000 postal workers walking off the job to demand fair wages and safer working conditions, businesses are scrambling to find alternative, often more expensive, shipping solutions.

The Crushing Weight of Increased Shipping Costs

Small businesses are bearing the brunt of this disruption. The longer the strike continues, the more significant the damage becomes. Jessica Duffield, owner of Wishes & Whatchamacallits, a small business selling pop culture-inspired products, described the situation as “a brutal and slightly devastating struggle.” With approximately 40 orders needing processing at the start of the strike, Duffield faces a stark choice: absorb crippling extra costs or risk devastating customer disappointment. Shipping larger items via Postes Canada, usually costing $8, now costs over $20 through alternative services – a substantial difference for a small business. Some businesses are even exploring extreme measures, such as driving across the border to utilize cheaper US postal services.

Dan Kelly, president of the Canadian Federation of Independent Business (CFIB), highlights the widespread impact. He's spoken with numerous small businesses reporting that alternative shipping solutions cost two to three times more than Postes Canada. Even businesses that can afford these alternatives face capacity issues with private couriers often unable to handle the increased volume.

The Ripple Effect: Beyond Shipping

The crisis extends beyond just shipping delays. Many businesses rely on postal mail for payments and invoices. The backlog of crucial financial documents means payments are delayed, with potentially significant knock-on effects on cash flow and supplier relationships. This is particularly concerning for small businesses which may already operate on tight margins and who rely on seasonal sales to boost their yearly profits. Some businesses are reporting that up to 40% of their annual sales are made during the holiday season. This means that a prolonged strike has the potential to severely damage business performance during a critical time of the year.

Innovative Solutions and Desperate Measures

Facing these challenges, businesses are resorting to creative solutions. OplusN, a Toronto-based artisan leather goods provider, which typically makes 70% of its annual sales during the holiday season, has introduced a local pickup option with a discount to incentivize customers to collect orders in person. They’re also partnering with Amazon to fulfill some orders, though this comes at a significantly higher cost and reduced profit margin. Such measures highlight the desperation felt by businesses trying to navigate this unprecedented situation.

Harley Finkelstein, president of Shopify, emphasized the devastating impact of the strike, especially so close to Black Friday. This underscores the significance of the crisis for Canada's small businesses, many of whom are already struggling with the lingering effects of the COVID-19 pandemic, labor shortages, and inflation.

A Perfect Storm for Small Businesses

The current situation adds to the existing economic pressures on small businesses. Many are still recovering from the pandemic and are also facing labor shortages and inflation. Recent labor disputes at ports in Montreal and Vancouver have further exacerbated the situation, highlighting the vulnerability of businesses to disruptions in essential services. The combination of these factors paints a concerning picture for the future of many small businesses.

The Government's Response and the Path Ahead

While the government has so far refrained from legislating a return to work, it's likely to be a consideration if the strike drags on. The Canadian government has a history of intervening in labour disputes that cause significant national disruption. Canada Post and the union are currently engaging in mediation, but with limited progress in the first few days of the talks. The outcome of the mediation efforts and the future direction of this dispute remain uncertain. The uncertainty, however, does not reduce the significant impact that the current postal strike is having on a large number of businesses across Canada. The coming weeks will be critical in determining whether small businesses can survive this challenge and maintain their operations until after the busy holiday season.

This situation highlights the interconnectedness of the Canadian economy and the vital role that essential services play in supporting the stability and success of small businesses. The consequences of this strike are far-reaching, extending beyond mere shipping delays, and impacting the livelihoods of countless Canadians. The coming weeks will be pivotal in determining the final impact of this labour action.

The need for a swift resolution is paramount, not just to ensure the smooth flow of goods and services but also to safeguard the future of countless small businesses that form the backbone of the Canadian economy. The success of the current mediation efforts is key to mitigating the long-term economic effects of this dispute.