A crowd gathers in Ottawa to show support for Canada Post employees. (Josh Marano/CTV News Ottawa)
Private delivery giants like FedEx and UPS are gaining a firmer grip on Canada’s $17 billion parcel market, while Canada Post continues to struggle with repeated labour unrest. With postal workers frequently striking over pay and conditions, many small businesses are no longer willing to take chances on delayed shipments.
Since last year, Canada Post has faced serious disruptions, especially during the busy holiday period. The most recent setback came in May when the Canadian Union of Postal Workers (CUPW) began a national overtime ban after failing to agree on a new contract.
For small business owners who rely on fast and reliable shipping, patience is wearing thin. Every time postal workers down their tools, retailers feel the blow. Many are now shifting toward private delivery firms, despite higher costs. “If you’re selling something like T-shirts or iPhone cases, you can’t risk delays,” said Michael Ashley Schulman of Running Point Capital. “So many switch to FedEx or UPS at the first sign of trouble.”
FedEx, sensing an opportunity, told Reuters it’s ready to ramp up services. The company plans to open temporary sorting facilities, change routes, and add more trucks to absorb increased demand from frustrated Canada Post customers.
UPS didn’t reveal its strategy, but the shift in the market is clear.
Lisa Graham, who runs YYC Beeswax, an online business in Calgary, said she had to rethink her entire shipping strategy after her company lost money during the 2024 holiday season due to Canada Post strikes. Though she had previously relied on Canada Post’s affordable small-package rates, she’s now using UPS, FedEx, and local courier services to keep orders moving. “If delivery might take more than two days, we pay more for a private courier,” she said.
The consequences of last year’s strikes were severe. Small and medium-sized companies across Canada lost more than $1 billion in revenue, according to the Canadian Federation of Independent Business.
Michael Cox, who imports goods from the UK for his Ottawa store, said he had no choice but to close his business temporarily during the strikes, as Canada Post was his only shipping option.
Canada’s parcel delivery market is expected to grow to over $21 billion by 2030. But Canada Post’s grip on that market is slipping fast. In 2019, the postal service held 62% of the market share. That number dropped to just 26.7% in 2024—and may fall further.
A Canada Post spokesperson admitted that the recent strike actions have taken a massive toll. Since CUPW resumed strike action in May 2025, the company has lost nearly 60% of its delivery business.
The 32-day strike last year alone led to losses of $208 million. Analysts now warn that if the labour disputes drag on, Canada Post could see its market share plummet even further—possibly into the teens by the end of 2026.
