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Canada Post on strike.

Canada Post says contract talks with its urban workers have stalled, but the union says it's eager to negotiate.

The Canadian Union of Postal Workers, which has been staging rotating strikes across the country since last week, responded to the Crown corporation's latest proposals Thursday morning, but by evening the post office said the two sides remain far apart on several key issues.

"We still have a generous offer on the table, the union's counter offer is unacceptable," said Canada Post spokesman Jon Hamilton.

"They've resisted any efforts to reduce cost and help meet the challenges this company is facing."

Canada Post said the union rejected "major compromises" to address sick leave and staffing levels and wouldn't discuss initiatives that would reduce costs and address the problems of declining mail volumes.

"In their latest counter-offer, the union has proposed the same solution to many of the difficult issues on the table - create a committee to study and talk about the issue for the next four years," said Mr. Hamilton. "That, plus more than 50 union demands on the table that would add jobs, increase costs and jeopardize the future of Canada Post, adds up to a step backwards."

Canada Post has said the rotating walkouts have had a disastrous effect on customer confidence and the Crown corporation's revenue since the first walkout last week.

Canada Post has cut staffing levels at its mail sorting plants and reduced the frequency of mail deliveries to just three days a week in urban centres to adjust to lower volumes since the rotating strikes began.

The union has said it is "calmly" sticking to its strategy of rotating strikes despite what it called "aggressive action" from Canada Post.

The strikes are to hit Quebec City and Kitchener, Ont., Friday.

In both locations, the union said Canada Post has downsized, closing a mail processing plant and trucking mail from Kitchener to Toronto to be sorted - meaning the loss of 350 jobs.

On Thursday workers walked the picket lines in 13 smaller cities across Canada.

The union contends its response to Canada Post's latest contract proposal was realistic and offers ways to tackle problems the corporation wasn't willing to address.

"We feel their proposals of doing absolutely nothing about staffing is unacceptable," said Gerry Deveau, CUPW national director for Ontario.

The union has voiced its concern over a double-standard employment system that would emerge under proposals by Canada Post. The post office has said it will hire future employees at a proposed starting wage of $19 an hour that will rise to $26 an hour over seven years. It has said the changes will help the corporation manage labour costs that represent two-thirds of its revenues.

But Mr. Deveau disagreed.

"What they're in essence doing is setting up a two-tier employee system and yet individuals are working side-by-side doing the same job," said Mr. Deveau. "It causes dissension amongst employees."

According to Mr. Deveau, the union also wanted to point out that while Canada Post was lamenting a drop in mail volumes, it wasn't talking about the increase it had seen in the amount of locations it delivered to and the reduction in workers it planned to employ as a result of modernization.

"We have a company that's owned by the citizens of Canada that for the past 16 years has made a profit every year, including the past two years when the rest of the world economy has been suffering," said Mr. Devau.

"They're anticipating job reductions as a result of modernization," he said. "And yet they're coming after the union and its members for concessions, when the level of concessions are not justified."

At the same time, CUPW said it is prepared to be flexible on its bargaining position provided that Canada Post is willing to address the problems its employees face in the workplace "We focus on the issues at the bargaining table," union president Denis Lemelin said in a statement issued Thursday night.

"Resolving our issues at the table will end this strike. So we will keep those issues in the forefront and go to the places where they are happening."

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