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February 29, 2000 9:40 AM, EST

United Parcel Service is threatening to sue the Canadian government for favoring Canada Post’s courier services and contravening North American Free Trade Agreement regulations, according to the Globe and Mail newspaper.

The Canadian unit of the Atlanta-based package delivery company filed a notice saying it intends to sue the government unless Ottawa takes steps to put the company on a more level footing with Canada Post, the Globe said.

A public affairs representative for UPS confirmed the filing of a complaint and said the company is “in consultation” with Canadian officials in an effort to head off a lawsuit.

UPS said it has lost C$100 million because Canada Post lets Purolator Courier use its national network without giving the same opportunity to foreign courier services.

Purolator, one of Canada’s largest courier companies whose main rivals are UPS and FedEx Corp., is 96% owned by Canada Post.