After more than two years of contentious negotiations and multiple work disruptions, Canada Post and the Canadian Union of Postal Workers (CUPW) announced they have reached agreements in principle on November 21, 2025. The breakthrough comes as the postal service reported record financial losses and just days before the critical holiday shipping season.

The tentative deal suspends ongoing rotating strike action that has disrupted mail delivery across Canada since November 2024. Both parties will now work to finalize contract language before presenting the agreements to union members for ratification.

Breaking Down the Tentative Agreement

While specific details of the agreements in principle remain under wraps until finalized, the deal covers both CUPW's urban bargaining unit and its rural and suburban unit, representing approximately 50,000 postal workers across Canada.

According to preliminary reports, the new agreement includes an 11 percent wage increase over three years, retroactive to January 1, 2024. This represents a significant concession by Canada Post, which has been struggling with mounting financial losses.

Strike Activity Suspended, Not Ended

CUPW president Jan Simpson emphasized that the suspension of strike activity is conditional. "Should the tentative agreements not be reached because the parties disagree on how the agreement in principle is reflected in language provisions, the suspension will be lifted for both parties, and the union may continue strike activity," the union stated in a bulletin to members.

Under the terms of the current agreement, Canada Post has also agreed not to lock out workers while both sides work to finalize contract language and prepare documents for the ratification vote.

The Long Road to an Agreement

Two Years of Bitter Negotiations

The current round of bargaining has been one of the most challenging in Canada Post's history. Negotiations began over two years ago, with both sides sparring over critical issues including wage increases, working conditions, job security, and the introduction of part-time workers.

Canada Post proposed controversial changes including seven-day-a-week delivery schedules and increased reliance on part-time workers, which the union strongly opposed. Workers were concerned these structural changes would erode job quality and full-time employment opportunities.

Strike Timeline: From November 2024 to November 2025

The labor dispute escalated dramatically in November 2024 when postal workers launched their first major strike, walking off the job on November 15, 2024. The initial strike lasted until December 17, 2024, when the federal government intervened, ordering workers back to their jobs through an independent labor board.

Between the two major strikes, workers engaged in various labor actions including overtime bans and refusals to deliver unaddressed flyers. In November 2025, workers resumed rotating strike action, targeting different regions on different days to maximize pressure on the postal service while maintaining some level of service.

The Financial Crisis Behind the Negotiations

Record Losses Push Canada Post to the Brink

The timing of the tentative agreement is critical, as Canada Post announced on the same day it had posted a record quarterly loss of $385 million for the three months ended September 30, 2025. Through the first nine months of 2025, the postal service has lost $703 million—more than double the losses from the previous year.

Canada Post's cumulative losses from 2018 to the second quarter of 2025 exceed $4.2 billion before taxes, with operational losses surpassing $5 billion. The 2024 fiscal year alone saw losses before tax of $841 million, marking the seventh consecutive annual loss for the crown corporation.

Business Exodus Accelerates Losses

The financial crisis has been compounded by the ongoing labor uncertainty. Online retailers, businesses, and individual customers switched to alternative delivery services like FedEx, UPS, and Purolator out of concern that labor disruptions could block critical deliveries.

This business exodus resulted in a stunning 40 percent drop in parcel revenue—historically one of Canada Post's most profitable segments. Many industry analysts warn that even after service fully resumes, regaining lost customers will be an uphill battle.

Government Intervention and Reform Mandates

The Canadian government under Prime Minister Mark Carney has taken an increasingly active role in Canada Post's future. Recently, the government ordered the postal service to move forward with structural reforms aimed at improving efficiency and reducing costs.

These mandated reforms include potential changes to delivery schedules, service standards, and workforce composition—precisely the issues that sparked such fierce resistance from the union during negotiations. Workers fear these reforms could lead to widespread job losses and the erosion of the universal postal service Canadians have relied on for generations.

What the Deal Means for Canadian Consumers

Mail Delivery Resumption

With strike activity suspended, Canadians can expect mail and package delivery to resume normal operations in the coming days. However, significant backlogs have accumulated during months of disrupted service, meaning it may take weeks to fully clear delayed shipments.

Holiday Shipping Concerns

The tentative agreement arrives just in time for the crucial holiday shipping season. December represents Canada Post's busiest period, with package volumes typically surging 30-40 percent above normal levels.

However, consumers who switched to alternative carriers during the strikes may continue using those services, potentially causing lasting damage to Canada Post's market share and revenue base.

Key Issues Resolved in the Tentative Agreement

Wage Increases and Retroactive Pay

The reported 11 percent wage increase over three years, retroactive to January 1, 2024, represents a substantial victory for workers who have argued their compensation has not kept pace with inflation and the demanding nature of postal work.

Working Conditions and Job Security

While full details remain confidential until finalized, sources indicate the agreement addresses concerns about working conditions, including physical demands, overtime requirements, and health and safety protections.

Job security provisions—particularly regarding the potential expansion of part-time positions—were reportedly among the most contentious issues. The final agreement likely includes protections for full-time workers while allowing some flexibility for Canada Post to manage costs.

The Ratification Process: What Happens Next

The agreements in principle must now be translated into formal tentative agreements with complete contract language. Once this process is complete, CUPW will present the contracts to its membership for a ratification vote.

1. Contract Language Finalization: Legal teams from both sides will work to translate agreed-upon principles into precise contractual terms.
2. Membership Information Sessions: Union leadership will hold meetings to explain the contract terms to members.
3. Ratification Vote: Members will vote to accept or reject the tentative agreements.
4. Implementation: If approved, contract terms will be implemented, including retroactive wage payments.

If members reject the agreements, or if the parties cannot agree on contract language, strike activity could resume, plunging Canada Post back into crisis during the critical holiday season.

Industry Perspectives on the Deal

Labor experts describe the tentative agreement as unusual, noting that finalizing contract language after reaching agreements in principle can sometimes prove more difficult than expected. Disagreements over specific wording and implementation details have derailed previous deals at this stage.

"This round of bargaining has been a challenging one. But members have stood together for strong public services, good jobs and a sustainable post office," said CUPW president Jan Simpson in a statement to members.

Frequently Asked Questions

When will mail delivery return to normal?

Mail and package delivery should resume within days as strike activity is suspended. However, clearing accumulated backlogs may take several weeks. Canada Post will prioritize time-sensitive items and work to restore full service as quickly as possible.

What happens if union members reject the tentative deal?

If members vote against ratification, or if the parties cannot agree on final contract language, the suspension of strike activity will be lifted. Workers could resume strikes, potentially causing further disruptions during the holiday season.

Will postal workers receive retroactive pay increases?

Yes, reports indicate the 11 percent wage increase over three years is retroactive to January 1, 2024, meaning workers will receive back pay for the period since the previous contract expired.

How much money has Canada Post lost during the strikes?

Canada Post lost over $1 billion in operational expenses in 2025 due to labor disruptions and business losses. The third quarter alone saw a record loss of $385 million, with parcel revenue down 40 percent as customers switched to competitors.

Will my holiday packages arrive on time?

With strike activity suspended, Canada Post will work to clear backlogs and handle holiday shipping. However, consumers who already made alternative arrangements should stick with those plans to ensure timely delivery.

The Broader Context: Canada Post's Uncertain Future

Even with a tentative labor agreement in place, Canada Post faces existential challenges that extend far beyond this contract dispute. The postal service operates in an increasingly digital world where traditional letter mail volumes continue their decades-long decline.

Meanwhile, the parcel delivery market—once viewed as Canada Post's salvation—has become intensely competitive, with private carriers offering faster delivery times and more flexible service options. The labor disruptions have only accelerated customer migration to these alternatives.

Government-mandated reforms loom on the horizon, potentially fundamentally reshaping how Canada Post operates, what services it provides, and how many employees it requires. Union leaders and workers remain deeply concerned these changes will dismantle the universal postal service that has served Canadians for over 150 years.

Looking Ahead: Cautious Optimism

The tentative agreements represent a significant step toward resolving one of Canada's longest and most disruptive labor disputes in recent memory. Both sides deserve credit for returning to the table and finding common ground after two years of acrimonious negotiations.

However, the deal remains fragile until members ratify it and contract language is finalized. Canadians, businesses, and postal workers themselves will watch anxiously over the coming weeks as this critical process unfolds.

For now, the suspension of strike activity offers relief to millions of Canadians who depend on Canada Post for mail delivery, especially as the holiday season approaches. Whether this tentative agreement can chart a sustainable path forward for Canada Post—balancing worker needs, financial realities, and service expectations—remains to be seen.