Canada Post due for big changes: C.D. Howe Institute Study
As change sweeps the postal sector, major reforms are due at Canada Post, according to a C.D. Howe Institute study released today. In Rerouting the Mail: Why Canada Post is Due for Reform, authors Edward M. Iacobucci and Michael J. Trebilcock, Professors in the Faculty of Law, University of Toronto, and Tracey D. Epps, Lecturer in Law, University of Otago, recommend that Canada Post, the government-owned monopoly, should ultimately be privatized, with an eye to improving postal performance.
The authors say Canada’s current postal system is anachronistic and incapable of responding to new challenges, such as the ubiquity of Internet communication, advances in retail services and logistics, and increasing competition from domestic and foreign competitors in numerous market segments.
The authors recommend a measured transition for Canada Post, with the federal government introducing competitive deregulation on a gradual basis to allow Canada Post and its workforce to make the required transition. Ottawa should also establish a regulator to oversee the system, a complaints bureau for citizens and consider subsidies, if required, to maintain universal postal service. Without reform, the postal service risks costly decline.
Many countries have undertaken postal sector reform with success, they note. In numerous European Union countries, there have been major improvements in on-time or next-day delivery and other measures of service quality. And in New Zealand, where economic liberalization has been most sweeping, the proportion of letters delivered next day increased from 88 percent in 1988 to 97 percent currently.
In the authors’ view, privatizing Canada Post would improve governance of the business, and introducing competition would provide a form of economic discipline that does not at present exist.
