Thousands of Canada Post workers receive bonuses for money-losing year

Steve Mertl
National Affairs Contributor
Daily Brew

Canada Post probably ranks right up there with Air Canada and the CBC on the list of institutions Canadians love to kick around.

In the 1960s through 1990s, it was known for the frequency of its labour disruptions and the slowness of its service. Work stoppages are rarer today and mail delivery, to me at least, seems generally quick and efficient.

But the postal service, which dates from Confederation, now struggles with shrinking revenues as it tries to cope with the growing dominance of the Internet.

It reported its first annual financial loss in 16 years last spring, showing a $327-million deficit for 2011 due to, yes, a labour disruption, declining delivery volumes, pension obligations and a costly court ruling on pay equity, according to the Globe and Mail.

So how is that Canada Post managed to find enough spare cash to pay bonuses to more than 7,400 employees in the same year it booked a loss?

After obtaining the information via access-to-information requests, the Toronto Star discovered that 7,402 employees, including 23 members of senior management, of the Crown corporation were paid incentives this year for their work in 2011.

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Canada Post would not reveal how much was paid, the Star reported.

The paper requested information on the average amount paid and the total amount of bonuses given out in the last four years, as well as details on payouts to top executives over the same period.

That information was denied on several grounds allowed under access-to-information legislation, including privacy and concerns about releasing competitive information.

The Star tried unsuccessfully to find out if Canada Post president Deepak Chopra received a bonus. Chopra was appointed chief executive in 2011 by the federal cabinet at an annual salary that ranges between $422,500 and $497,100, with the possibility of a bonus of up to a third of his salary, the paper said.

"The Privy Council Office does not discuss the personal information, including performance ratings, of governor in council appointees," Privy Council spokesman Raymond Rivet told the Star via email.

Canada Post spokesman Jon Hamilton told the Star that while it's no secret the service lost money last year, it needs more than ever to keep its talent and provide incentives for performance.

"Canada Post is in the middle of the most important transformation in the company's history," Hamilton said. "The challenges that we need to overcome to meet the changing needs of Canadians are huge."

Canada Post receives no taxpayer money to operate but does use a "pay at risk" policy employed in other parts of the public sector, Hamilton told the Star. Employees get a lower base salary but can earn more if they hit certain benchmarks.

The number of employees who got bonus payments has been trending downward, the Star noted. Last year, 7,746 received them, while in 2010 the number was 8,120.

About two-thirds of those who received bonuses were unionized employees but Canada Post did not pay corporate team incentives — an across-the-board bonus to all 56,000 workers.

Bonuses apparently aren't unusual when companies perform poorly, Richard Powers, director of governance programs at the University of Toronto's Rotman School of Management, told the Star.

For example, top executives at the Canada Pension Plan Investment Board received $7 million in bonuses in 2009 even though they lost $24 billion in bad investments, he said. But it did better than other investment funds in the wake of the 2008 financial collapse, Powers said.

Meanwhile, Canada Post reached a tentative collective agreement with its main union over the weekend.