Canada Post's largest union has rejected the mail carrier's proposal of a "cooling off" period followed by mediation that would have brought an end to all strike activity until January.

On Monday morning, the carrier proposed the two sides agree to mediation to settle their month-long strike before it cripples the key holiday shopping season. The company set a deadline of 5 p.m. ET on Monday for its offer, which came with a $1,000 bonus to each employee if there was no more strike activity up until the end of January.

If mediation didn't work, Canada Post was asking its union to agree to binding arbitration as of Feb. 1, 2019. But the union rejected the idea in the afternoon, saying it prefers to settle the dispute through collective bargaining.

"We aren't doing this to harm the public, but the proposal asks our members to go back to work at the heaviest and most stressful time of year, under the same conditions that produce the highest injury rate in the federal sector," said Mike Palecek, Canada Union of Postal Workers (CUPW) president. "We are confident that an agreement can be reached, if only Canada Post would address the issues and stop looking for ways not to negotiate."

The two sides have been at odds since the middle of October over pay and job safety issues. So far, the union's main weapon has been short, targeted strikes shutting down delivery service in specific locations at a time.

Monday's strike action was scheduled for Edmonton, Kitchener, Ont., Kelowna, B.C., and a handful of other places.

But the impact of those actions are being felt nationally, as the postal service says it currently has about 550 trucks full of parcels waiting to be delivered, and it has asked the postal services of other countries to stop sending things to Canada until it can clear it.

Within minutes of CUPW's statement, federal Labour Minister Patty Hajdu renewed her call for the two sides to continue bargaining, but did not say whether the government is contemplating back-to-work legislation.

"We've encouraged [both sides] to work together. We've appointed special mediators," Hajdu said on her way into the House of Commons. "They are not open to voluntary arbitration, so we're reviewing the evidence right now, and we'll have more to say in the days to come."

The Retail Council of Canada and other businesses have urged the federal government to legislate an end to the strike.

Canada Post workers have been on rotating strikes for the past month. (Andrew Vaughan/Canadian Press)

Busiest time of year for parcel service

"If we don't clear the backlog soon, those Black Friday [and] Cyber Monday volumes are going to hit" Canada Post, spokesperson Jon Hamilton said, "and that kicks off a period of several weeks where we see double the volumes that we normally do."

The busiest time of year for parcel service is the period between Black Friday after U.S. Thanksgiving, through the holiday season. That's set to begin this Friday, so Hamilton says he expects even more parcels "are going to start coming and coming fast."

More than 200,000 Canadian businesses rely on Canada Post to ship goods to customers, and many of the smaller ones will be left in a lurch, says Andrea Stairs, general manager for online selling marketplace eBay Canada.

The big guys can figure out alternative shipping arrangements, and they can afford them. The little guys are the ones that have real difficulty with that. - Andrea Stairs, general manager for eBay Canada

"The big guys can figure out alternative shipping arrangements, and they can afford them," Stairs said. "The little guys are the ones that have real difficulty with that."

Small shops that sell goods across the country on eBay rely on Canada Post to ship between 80 to 90 per cent of everything they sell, Stairs said.

"If the postal system breaks, businesses have real consequences," Stairs said.

Late last week, Canada Post made another offer to the union representing 42,000 urban employees and 8,000 rural and suburban carriers, an offer that was rejected by the union, which proposed a counteroffer that was also rejected.

The union's latest offer proposed:

A 2.9 per cent annual wage increase.

Double-time pay for working a sixth or seventh day.

New wage advancements for temporary workers, based on working 1,000 hours in a fiscal year.

Injury pay at 80 per cent of regular salary.

Improvements to the company's short-term disability plan.

The offer from Canada Post included: