On Friday September 9th CUPW and Canada Post signed a Memorandum of Agreement (MOA) regarding Rural and Suburban Mail Carriers' (RSMC) vehicle expenses.

Effective September 1, 2005 RSMC members shall receive an additional 3 cents (3¢) for all kilometres driven annually. This increases the amounts in clause 33.01 (c) of the collective agreement to forty five cents (45¢) per kilometre for the first 5,000 kilometres traveled yearly and thirty-nine cents (39¢) per kilometre for the additional kilometres traveled beyond 5,000 kilometres yearly.

For the entire bargaining unit this represents $2.9 million dollars in non taxable income.

For individuals, the impact of a 3 cent (3¢) increase will vary based on the number of litres a vehicle consumes in completing the duties of a route. For example, if a vehicle gets 10 kilometres per litre this increase represents 30 cents (30¢) per litre. Obviously the type of vehicle, road conditions, length of the route, the number of stops and other factors would influence fuel consumption.

In another example, an RSMC with a 50 kilometre a day route would receive an extra $1.50 per day. If 8 litres of fuel were used the $1.50 would translate to an extra 18 cents (18¢) per litre.

Vehicle Expenses During Paid Leaves

The MOA also addresses payment of vehicle expense to employees during paid leaves such as vacation and bereavement leave.

Canada Revenue Agency (CRA) regulations, scheduled to be applied on October 1, 2005, say that any vehicle expense payment received by an employee during paid leave is subject to deduction of income tax and Canada/Quebec Pension Plan and Employment Insurance premiums.

The amount deducted would vary based on an employee's annual wage compensation. Overall, a significant amount of money would be diverted from the members' pockets to the government. Additionally, the employer's share of CPP/QPP and EI premiums would be charged to the financial cap.

The MOA provides that the payment of vehicle expenses during paid leaves will stop effective September 1, 2005. This money will be diverted to partially fund the 3 cents (3¢) per kilometer increase. Canada Post has agreed to cover the balance from outside of the financial cap. The amount of that balance will depend on the amount of paid leave taken in the future but in any case will be significant.

Membership Actions

The union was able to reach this agreement with Canada Post because RSMC members in a number of locals sent Canada Post a strong public message that is was simply wrong for workers to bear the brunt of the increase in fuel costs.

The Next Step

Currently members are voting on a program of demands that include a provision for incorporating vehicle expense increases in the collective agreement. Your negotiating committee will need your support in the upcoming months in their efforts to improve the collective agreement.