The Canadian Union of Postal Workers says Canada Post is trying to “bully” its employees with a 72-hour lockout notice, while the Crown corporation argues it can’t afford to meet the union’s demands.

In a statement issued early Tuesday, Canada Post said it plans to suspend the collective agreement with CUPW as of Friday, which could result in a work stoppage.

The Crown corporation said the union’s demands would cost $1 billion over the life of a new contract – an amount Canada Post says it can’t afford due to a “rapidly deteriorating business situation,” which includes a 32 per cent drop in letter mail since 2006.

Canada Post generated $2 billion of revenue in the first quarter of 2016, leading to a net profit of about $24 million. That was up from a $14-million profit on about $2.1 billion of revenue in the first quarter of 2015.

While transaction mail fell 6.6 per cent year-over-year, parcel volumes increased 14.4 per cent in 2015, thanks to an uptick in online shopping.

However, Canada Post said in its annual report that the growing business segments are promising, but “will not be enough to offset the decline in the core letter mail business and pay for the pension.”

‘Unscrupulous employer’: union

At a news conference on Tuesday morning, CUPW president Mike Palecek called Canada Post an “unscrupulous employer” who is trying to “provoke” its 50,000 workers with the lockout notice.

Nevertheless, he said, the union has no plans to respond with a strike notice and is still hoping that a deal can be negotiated.

“Our goal is to continue the service to the public. We are going to do everything in our power to make sure that the postal system still runs,” Palecek said.

“We’ve been sounding the alarm about this for some time,” he said of the lockout notice.

“It has been patently obvious by (management’s) behaviour at the table and in public that their intention was to provoke a labour dispute and this is exactly what they’ve done.”

He urged union members not to be “fooled” or “provoked” by their “bully bosses.”

Over the course of lengthy negotiations, Palecek said the company has refused to discuss the union’s proposals.

Gendered pay gap?

Palecek said that pay equity has been one of the main sticking points. He said that rural and suburban mail carriers, who are mostly women, make 28 per cent less than their urban, mostly male counterparts.

He said the issue of gender pay equity must be addressed.

But Canada Post spokesperson Jon Hamilton said the union’s pay equity argument is “simply not true and they know it.”

Hamilton told CTV News Channel on Tuesday that there are different pay structures for urban and rural mail carriers.

Urban workers get paid for an eight-hour workday, while rural and suburban carriers are compensated through what he called a “variable pay-based model,” which means compensation depends on the mail carrier’s route.

In some rural areas with less demand, it’s more of a part-time job, Hamilton said.

He also denied the union’s accusations that Canada Post has been planning a lockout all along.

“It really doesn’t make a lot of sense. We have all along wanted to get an offer and have been trying to negotiate a deal,” he said.

Pension proposal

Hamilton said Canada Post had met the union’s demands surrounding job security and pension plans for current employees, but that wasn’t enough to reach a deal.

Canada Post employees currently receive a “defined benefit” pension, which guarantees a certain payout. The employer had proposed switching future employees to a “defined contribution” plan, where the employer pays a certain amount but does not guarantee any return.

Although the current pension plan had $21.9 billion of assets at Dec. 31, 2015, Canada Post is liable for a $6.2-billion solvency deficit.

Federal response

Prime Minister Justin Trudeau said Tuesday that he has asked Minister of Labour MaryAnn Mihychuk “to work with both parties at the negotiating table to ensure we come to a positive outcome to this situation."

Asked whether the federal government is considering legislation that would force Canada Post employees to return to work in the event of a labour disruption, Trudeau said the issue should be worked out at the bargaining table.

He said his government doesn’t want to be “heavy-handed.”

“We respect labour and we respect the need to come to terms at the bargaining table and that is what we’re going to continue to work on.”

In the event of a work stoppage, certain government cheques will still be delivered to recipients.

The Canada Revenue Agency has deemed Old Age Security, Canada Pension Plan, Working Income Tax Benefit and the Canada Child Benefit cheques essential.

With files from The Canadian Press