Canadian SMBs received an unexpected twist in the long-running Canada Post dispute after the Crown corporation and the Canadian Union of Postal Workers (CUPW) announced agreements in principle without a signed contract.

After more than two years of bargaining, the move raised questions across the small business community, especially for owners who depend on mail and parcel flow to keep inventory moving and customers satisfied.

CUPW said both sides have agreed on the key elements of new collective agreements covering urban and rural postal workers. The union said the current agreements will remain in effect while negotiators develop the final contract language that will go to members for a ratification vote. “Both sides have agreed on the main points of the deals, but we need to agree on the contractual language that will form the collective agreements that would be put to a vote by the members,” Jan Simpson, National President of the Canadian Union of Postal Workers (CUPW), said in an official bulletin.

Simpson noted that strike action will pause once the agreements are signed, while Canada Post will suspend any lockout plans. CUPW added that it retains the right to resume strike activity until ratification is complete. If the parties cannot settle the wording, “the suspension will be lifted for both parties, and the union may continue strike activity.”

Labour experts said the structure of the agreement is unusual. Employment and labour lawyer Sundeep Gokhale told CTV News the parties have reached conceptual alignment on major issues but not on the detailed language that normally defines a final collective agreement. “What they’ve done is they’ve said, ‘Conceptually, we’ve agreed on the big picture issues. But now we’re going to put pen to paper, and provided that we have an agreement, we’ll ultimately take it to a ratification vote,’” Gokhale said.

The timing added pressure. Canada Post reported a quarterly loss of more than $500 million the same day the agreement in principle was announced, adding to a nine-month loss of $989 million. The corporation said it requires continued federal financial support. Gokhale noted the proximity of the agreement to the disclosure of losses, saying “all of a sudden, then there’s an agreement to ultimately get to a tentative agreement,” according to the report.

Why the tentative deal matters for Canadian SMBs

For SMBs already under pressure from supply chain delays, the strike created further disruption to customer deliveries and returns. Business groups warned in late September that the nationwide work stoppage would lead to higher courier costs and lost sales for small retailers and service providers. Many SMB owners said they began building manual workarounds as parcel times shifted without notice.

Those operational issues were tied to the same staffing and workload pressures at the centre of bargaining. Canada Post proposed expanding part-time employment, while CUPW sought additional medical days beyond the seven personal days in the existing agreements. Changes to staffing structures and available labour can affect how consistently mail and parcel routes operate, especially in smaller communities where fewer workers cover broader areas.

Gokhale said Canada Post gained more flexibility to adjust rural post offices and community mailbox locations. These operational shifts have been long-standing priorities for the organization and could directly influence how reliably SMBs access local pickup and delivery services once a final agreement is reached.

Timeline of the Canada Post and CUPW negotiations

Formal bargaining began in November 2023. By May 2025, CUPW launched a nationwide overtime ban. In mid-September, the union directed members to stop delivering unaddressed flyers. On 25 September 2025, a nationwide strike began after the federal government announced a plan to restructure Canada Post, which included ending door-to-door delivery and closing rural post offices.

Talks stalled in late September and early October, prompting the special federal mediator to pause discussions. CUPW accused Canada Post of intimidation after temporary layoff notices were issued to striking workers, though the union later overturned those notices in mediation. By mid-October, the dispute shifted from a full strike to rotating strikes as parliamentary committee hearings examined Canada Post’s financial challenges.

On 9 November, Canada Post submitted a restructuring plan to the federal government that included workforce reductions and service changes. On 18 November, the organization disclosed its steep financial losses. CUPW said it wanted wage increases tied to inflation and operating costs over a five-year period. Three days later, the parties announced the agreements in principle.

Now, as negotiators revise contract language, the strike remains paused but not resolved. CUPW members will vote once a final document is ready.

For SMB owners and HR leaders, the uncertainty remains. While operations have stabilized for the moment, the risk of renewed disruption remains real. Many small businesses have adjusted shipping timelines or diversified their carriers, but the possibility of new delays looms in the background as the busiest fulfilment period of the year approaches.