Canada Post recorded a loss before tax of $94 million for the third quarter of 2018, mainly due to the costs of implementing the final pay equity ruling.
The ruling will adjust how much delivery employees in suburban and rural Canada (RSMC) are paid, said the corporation in a news release issued on Tuesday.
“If not for the pay equity costs related to prior years, the corporation would have reported a small profit before tax for the first three quarters of 2018. The impact of pay equity and ongoing rotating strikes are major factors in the corporation expecting to end 2018 with a loss,” said Canada Post as the federal government passed legislation ordering employees back to work.
“In the third quarter, Canada Post remained the country’s leading parcel delivery company, and has grown its Parcels revenue year over year in 25 of the last 26 quarters. The Canada Post segment’s $94-million loss before tax in the third quarter compares to a $64-million loss before tax in the third quarter of 2017. For the first three quarters of 2018, Canada Post is reporting a loss before tax of $266 million, compared to a profit before tax of $13 million for the same period in 2017.”
According to Canada Post, in 2016, the corporation and the Canadian Union of Postal Workers jointly agreed to put before an arbitrator the system by which RSMC employees are paid. A final ruling issued on Sept. 20, 2018, gave the parties clarity on this important issue. Canada Post said it expects pay equity will cost about $550 million by the end of 2018, of which $130 million was recorded by the end of 2017.
“Going forward, the corporation expects pay equity will cost approximately $140 million annually. The pay and benefit changes resulting from the ruling include wage adjustments, increases in pensionable pay and other benefits that have significantly impacted the 2018 financial performance,” it said.