Retailers across Canada are bracing for significant disruptions as a nationwide Canada Post strike looms, with a walkout set to begin as early as May 22. From e-commerce deliveries and flyer distribution to supply chain logistics in remote areas, the strike could reverberate through key segments of Canadian retail during the lead-up to the back-to-school season.

Gary Newbury, supply chain expert and founder of RetailAID, warns the consequences could be long-lasting.

“Retailers who were caught off guard last year should have learned their lesson,” he said. “This isn’t just a labour dispute—it’s a wake-up call for the retail sector to modernize.”

The current situation echoes the labour unrest of late 2024, when more than 55,000 Canada Post workers went on strike for 32 days, ending only after the Canada Industrial Relations Board ordered a return to work on December 17. The federal government extended the collective agreement to May 22, 2025, to allow for continued negotiations.

Talks between Canada Post and the Canadian Union of Postal Workers (CUPW) have since stalled. The union is demanding a 24% wage increase over four years and greater protections for rural workers. Canada Post, meanwhile, wants to introduce part-time weekend delivery workers to enhance flexibility and competitiveness. A federal mediator and a government-appointed Industrial Inquiry Commission have been involved, but no resolution has been reached.

“We’re in the same place we were five months ago,” said Newbury. “Only now, we’re heading into another peak retail period—this time, back-to-school.”

Parcel shipping will bear the brunt of the disruption, particularly for small and mid-sized e-commerce retailers who rely on Canada Post for affordable delivery services.

“Many independent retailers already took a hit during the last strike,” said Newbury. “They’ve since been contacting FedEx, Purolator, and UPS to establish new partnerships.”

Even for retailers who still use Canada Post, the uncertainty is driving change. “Some have rate shopping software that compares carriers in real time. AI is already helping retailers choose faster, cheaper alternatives,” he noted.

Consumers may see longer delivery estimates or be encouraged to shop in-store. “Orders placed after May 19 could get trapped in the system,” Newbury warned. “If the strike starts on May 22, mail and parcels sitting at sortation centres might be stuck for weeks.”

Canada Post remains a vital service in many rural and remote communities where private courier services don’t operate consistently. According to Newbury, these areas could face critical delivery delays—not only for online orders, but also for legal documents, pension cheques, and government payments.

“Those who are vulnerable—like seniors on Employment Insurance or people needing legal documents—don’t always have digital options,” he said. “During the last strike, Canada Post may have found a way to get some critical mail through, but it wasn’t consistent.”

Retailers in these areas are in a tough position. “They often don’t have the volume to justify using UPS or FedEx,” Newbury said. “When Canada Post goes down, so do their e-commerce operations.”

Although most store inventory moves through freight trucking and not Canada Post, Newbury cautions that a strike could derail online orders for back-to-school products—particularly in rural or suburban markets where families rely on online shopping.

“This is about timing,” he said. “Back-to-school flyers, online deals, and promotional sales often hit weeks in advance. If your flyer doesn’t get delivered or your parcels don’t ship, you miss the season.”

He added that consumers may opt to shop in-store more frequently to avoid delays. “There could be a short-term surge in local shopping, especially if retailers communicate early and clearly,” he said.

While much of the media focus has been on parcel delays, Newbury pointed to another overlooked but vital service—flyer distribution. For years, Canada Post has been a primary delivery channel for weekly retail flyers, especially since the closure of many community newspapers.

“This has been bread-and-butter work for Canada Post,” said Newbury. “In places like Oshawa, where local papers like Oshawa This Week folded, flyer delivery became a key function.”

He explained that flyer circulation was suspended during last year’s strike to avoid the cost of printing ads that would sit undelivered in trailers or sortation facilities. “If the flyers arrive weeks late, the promotions are already expired. Retailers don’t want to waste that budget.”

Retailers should have already begun shifting their strategy, he added. “Following the debacle over last year’s peak trading, retailers ought to have been pushing consumers to go digital—viewing flyers online, signing up for emails, or using mobile apps with personalized offers.”

Newbury said he suspects flyers were mailed out this week for delivery next week, with the expectation that distribution will halt entirely once a strike is confirmed. “Retailers can’t afford to gamble on whether their flyer will ever make it into mailboxes.”

Canada Post has struggled with declining letter volumes for over a decade, with annual mail dropping from 10 billion letters to less than 2 billion. Parcel volumes surged during the early days of e-commerce but have become increasingly competitive as Amazon and private carriers build out their networks.

“Canada Post had an opportunity to be the backbone of Canadian e-commerce,” said Newbury. “Instead, they shut down local sort centres, centralized operations, and failed to innovate.”

He pointed out that simple changes—such as restoring local mini sortation centres—could significantly improve delivery speed and efficiency. “If I send a package within Whitby, why does it have to go to Mississauga and back? That makes no sense.”

Because Canada Post is a Crown corporation, the federal government plays a direct role in its governance. Newbury argued that Ottawa has been too passive in handling the dispute.

“They sent in a mediator, but they haven’t asserted control,” he said. “If they’re going to keep funding a business that loses $750 million to $1.5 billion annually, taxpayers deserve better oversight.”

He added that without serious intervention—either to modernize operations or renegotiate labour agreements—Canada Post could lose more ground to private competitors. “We’re not talking about a few parcels here. This is systemic. It’s a reputational hit they might not recover from.”

With the strike deadline approaching, Newbury urged Canadian retailers to act immediately.

“Retailers need two contingency strategies: first, secure alternative carriers; second, be transparent with customers,” he said. “Let them know there could be delays. Encourage local pickup where possible.”

Some small retailers may even suspend online sales altogether. “If the cost of using a private carrier outweighs the margin on the sale, it’s not worth it. A few are already saying, ‘Come to the store instead,’” said Newbury.

As for flyers, Newbury noted: “This week may be the last reliable opportunity to distribute printed promotions for a while. After that, the shift to digital needs to accelerate.”