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Canada Post lockout drives thousands to switch to online billing

Nicole Mackoway looks over her bills at her home in Edmonton on June 27, 2011. Because of the postal strike, Ms. Mackoway now pays and receives her bills online.

Jason Franson for Globe and Mail/Jason Franson for Globe and Mail

Canada Post employees can expect a lighter load once they've dealt with the backlog of mail they're facing this week.

Thousands of frustrated consumers across the country have made the switch to receiving their banking and cable and utility bills online, in response to the labour dispute between the Crown corporation and its 48,000 unionized employees.

By making it inconvenient for people to pay their bills, the battle has accelerated the shift away from paper statements – a change that is posing a major challenge to Canada Post as it finds its place in an increasingly digital world.

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Mail is expected to be on the move again on Tuesday, nearly a month after members of the Canadian Union of Postal Workers began a series of rolling strikes in large part to protest wage rates. This week, both union and management, which locked out workers on June 14, have said they will comply with the federal government's back-to-work legislation after a weeks of divisive – and at times bitter – debate on Parliament Hill.

Post offices were scheduled to start delivery Tuesday morning after employees were ordered back to work on Sunday. But Canada Post has already suffered a great deal of damage – as the dispute dragged on, the corporation said the labour action was costing tens of millions of dollars in lost business.

Count Nicole Mackoway among the people who saw the strife at Canada Post as a good time to make a switch. Ms. Mackoway, a stylist based in Edmonton, decided to get rid of all her paper bills – two power bills, two credit card bills and three phone bills.

"I hate getting bills in the mail anyway – this way any mail that comes will be fun," she said.

ING Direct, a bank that conducts its business by Internet or phone, had 350,000 customers switch to online banking in the past two weeks. Almost half of its 1.8 million Canadian customers now receive their banking statements exclusively online.

"The postal strike created a small catalyst at a time when it's already easy to make a change to online," said Peter Aceto, chief executive officer of ING Direct Canada. "Canada Post has gone from the thing we relied on most to communicate a few decades ago to becoming a smaller part of our lives."

Canada Post will lose at least $2,352,000 a year in revenue from ING Direct on stamps alone, assuming the company sends each of those 350,000 people one letter a month at the commercial price of $0.56 a stamp.

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It isn't just banks that will save from the switch to online bills and statements.

At Shaw Communications Inc., a telecommunications company, about 70,000 people signed up for online billing in June.

"That's probably 10 times more than we would normally see," said Peter Bissonnette, Shaw's president.

"Clearly the labour disruption has driven that behaviour," he said. "We're very pleased that customers are finding other ways to do their billing."

Enmax Corporation, a Calgary-based utility, had 5,000 customers enroll in its online billing system – a "very dramatic increase," spokesman Ian Todd wrote in an e-mail.

Rogers Communications and TD Canada Trust also saw increases in customers choosing online bills and banking, but did not have exact numbers.

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Jon Hamilton, a spokesman for Canada Post, says the corporation tried to convince the union that even the threat of a strike could have an impact.

"We went out talking to our employees as much as a year and a half ago, saying, 'We need to understand that there are options available to our customers these days,' " he said. "The exclusive privilege we enjoy on letter mail is over – we have a huge competitor and it's called the Internet."

Canada Post has much to figure out to remain relevant, but charities, seniors, people in rural areas and small-business owners still rely on its extensive network, Mr. Hamilton said.

"The strike may have hastened the process for some people to switch, but the long-run trend was there anyway," said Richard Chaykowski, a professor of industrial relations at Queen's University.

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