MONTREAL — Postal workers have given the thumbs-up to a new contract, casting their ballots overwhelmingly to approve a tentative agreement after more than two years of labour strife.

The union representing some 55,000 Canada Post employees said Monday that more than four in five voted in favour of the five-year deal, which includes wage increases of 6.5 per cent and three per cent in the first two years. It also locks in hikes that match the annual inflation rate in years three through five, on top of enhanced benefits and a weekend parcel delivery model.

About 86 per cent of rural and suburban mail carriers voted to accept the contract, and 89 per cent of urban workers gave it the green light, according to the Canadian Union of Postal Workers.

The parties will “soon sign” the agreements, which expire on Jan. 31, 2029, Canada Post said.

The deal marks the denouement of a drawn-out saga of collective bargaining and rotating strikes amid a push to overhaul the Crown corporation’s business model in the face of declining letter mail and mounting financial losses, which topped $5 billion between 2018 and 2025.

Canada Post and the union have long sparred over wages and structural changes to the postal service, with workers taking to the picket line repeatedly throughout the negotiations. Both sides agreed not to launch any strikes or lockouts while the six-week ratification vote took place.

About 60 per cent of the union board endorsed the proposed collective agreement, saying it ensures job security, but the union’s president had asked members to reject it, arguing it rolls back rights and compensation.

“We still have our work cut out for us. To win the fights ahead, prepare for the next round of bargaining and mobilize against the government’s attacks on our public postal service, we all have to regroup and unite in our struggle,” said president Jan Simpson in a bulletin to members Monday.

In a statement, Canada Post CEO Doug Ettinger said he was pleased with the outcome and that the new deal offers stability and a path to “restore confidence in the postal system.”

“While the process was challenging, these negotiated agreements recognize that Canada Post needs to change.”

Amid declining letter demand and steep competition for parcels, the Crown corporation has said it must modernize through reforms that include community mailboxes, weekend parcel delivery and possible post office closures.

The road to ratification has been a long one.

In December 2024, the federal government asked the Canada Industrial Relations Board to step in to quash a month-long strike, and struck an Industrial Inquiry Commission to determine a path forward.

That probe, led by William Kaplan, made a series of recommendations that were later adopted and rolled out in a suite of sweeping changes to Canada Post’s mandate.

Announced in September, the overhaul lifted a moratorium on community mailbox conversions, authorizing the mail carrier to convert the remaining four million addresses that still receive door-to-door delivery. The government also announced an end to the freeze on rural post office closures — some locations are now surrounded by suburban subdivisions — that has been in place since 1994, covering close to 4,000 outlets.

On Monday, Procurement Minister Joel Lightbound said the agreement marked a milestone for the Crown corporation.

“This is an important moment for workers, for Canada Post, and for the millions of Canadians and businesses who rely on a stable and reliable postal service every day,” he said in an emailed statement.

On Friday, the postal service reported that it lost $205 million before taxes in the first quarter of the year as it moves forward with the overhaul.

Last month, the federal government handed $673 million to Canada Post to keep the money-bleeding mail service afloat for the current fiscal year.

That amount was carried over from the roughly $1 billion Ottawa authorized in a massive funding top-up earlier this year. It also followed last year’s initial $1.03-billion cash injection, which failed to sustain the postal service past early February 2026.

This report by The Canadian Press was first published June 1, 2026.

Christopher Reynolds, The Canadian Press