Mandate Review (Canada Post)

Introduction

In reviewing the mandate and assessing the future of an institution that touches as many lives as Canada Post Corporation, one cannot hope to entirely satisfy everyone. Interests legitimately diverge, and perspectives honestly differ.
What is essential is that every point of view be given a full and fair hearing, and that all available information be objectively and thoroughly assessed. This the Review has made every attempt to do. In carrying out the responsibilities entrusted to me on behalf of the Government by the then Minister Responsible for Canada Post, the Honourable David Dingwall, in November 1995, I have been guided at all times by a determination that the processes of this Review must be as open, accessible, independent and even-handed as humanly possible.
To that end, the Review placed advertisements in 678 newspapers and sent letters to close to 1,000 potentially interested parties, inviting written submissions by the deadline of February 15, 1996. A total of 440 formal submissions and 1,084 letters were received, including petitions from municipalities with a total of 2,480 signatures. To ensure maximum public access, all formal submissions were posted by the Review on the internet. As well, 1,116 telephone calls about substantive issues pertaining to the Review were received from Canadians across the country. This constitutes evidence of a remarkably high level of current nation-wide interest in the role and activities of Canada Post. By way of comparison, the last review of the mandate of the corporation a decade ago received a total of 131 submissions, including letters.
Public meetings were held in March and April in six Canadian cities: Vancouver, Winnipeg, Montreal, Halifax, Toronto and Ottawa. Their purpose was to permit the Review to hear first-hand a representative cross-section of the organizations, companies and individuals who had made submissions and to explore their views through brief dialogue. Canada Post and the Canadian Union of Postal Workers (CUPW), at their respective requests, appeared before the Review in each of the cities. Time was also set aside at the end of each day for members of the general public to offer brief comments. A total of 111 presentations were heard in 14 days of public meetings, not including the representatives of Canada Post Corporation and the CUPW, who appeared at each location.
To ensure that a sampling of the ideas and concerns of Canadians in rural areas could be communicated as clearly as those of interested parties in urban centres, the Review supplemented the formal public meetings with town hall meetings in Witless Bay, (Newfoundland) and Iqaluit, (Northwest Territories) and with focus groups in Bay Bulls, (Newfoundland), Unity, (Saskatchewan) and Iqaluit. Urban focus groups were also held in Montreal, Toronto, and Calgary. A total of 96 individuals participated in these focus groups. And, finally, nation-wide quantitative research with a total sample of 1500 was conducted for the Review by Decima Research.
In order to provide access to the best possible information, the Review also had informal meetings with appropriate individuals and organizations in the United States and Canada. In the United States, the Review met in Washington with Mr. Michael S. Coughlin, the U.S. Deputy Postmaster, and senior members of his staff, as well as with Mr. Dan Blair, Staff Director, Postal Service Subcommittee of the U.S. House of Representatives. In New York, the Review met with specialists on the impact of information technologies at Columbia University, and with a panel of experts kindly assembled by the Canadian Consul General in New York, Mr. George Haynal. Here in Canada, the Review held extensive individual discussions with the senior management of Canada Post, including members of the Board of Directors, and with the leadership of all the postal unions, particularly CUPW, as well as with CUPW representatives from across the country. The Review also met with the executives of all the Postal Service Customer Councils and with a range of other private sector stakeholders.
It is appropriate here to thank all the individuals and organizations who took the trouble to make their views known in the course of this consultation process, and particularly those who appeared in person before the Review. It was a very encouraging and uplifting experience to see so many Canadians, whatever their points of view, demonstrating their caring about the institutions of this country and stating their concerns and ideas lucidly, thoughtfully and often in a spirit of remarkable candor.
I was assisted in the organizational, research and analytical work of the Review by a small staff of extraordinarily gifted and dedicated professionals, many of them seconded from various Government departments, who accomplished remarkable work in the short time available. In the structure of this Review, arriving at findings and recommendations was the sole province of the Chairman rather than a committee, so the staff are innocent of any shortcomings in the final result. No one could have wanted a more helpful and supportive team for a project of this nature. My deepest thanks to them all.
Without intruding inappropriately on the traditional professional anonymity of the other public servants on the staff, I do want to acknowledge particularly the contributions of the three members of the Review's "management team".
Dona Vallières was responsible for all communications and stakeholder liaison, including designing and organizing the entire consultation process of submissions, public meetings, town hall meetings and focus groups, and for the editing and production of this final report. Her consummate tact, skills and professionalism were the key to the success of the Review's efforts.
Art Lamarche, as Executive Assistant, handled all aspects of administration and staff and research coordination with exemplary expertise and boundless energy. Without his wide-ranging help, it would have been impossible to accomplish so much work in the available time.
Professor Donald Savoie, as Senior Policy Advisor, brought to the Review an encyclopaedic knowledge of public policy and an unfailing capacity for invaluable insights. His advice opened numerous avenues of thought and helped avoid many pitfalls.
Appreciation is also due to the members of the Advisory Committee of senior representatives from the Treasury Board Secretariat/Department of Finance, Privy Council Office and Public Works and Government Services, who were supportive of the work of the Review without in any way attempting to influence its course or substance. I also wish to thank the officials from Public Works and Government Services who, on behalf of the Minister Responsible for Canada Post, ensured that the Review had all necessary resources.

George Radwanski

1 Overview

In the decade since the last mandate review of Canada Post Corporation, there have been major changes in the technological, economic and policy environments in which the corporation operates.
There have also been important changes in the corporation itself. Canada Post's earlier years were an attempt to strike a delicate balance between the competing demands of public service and commercial orientation that are a tension inherent in most Crown corporations. Over the past decade, Canada Post has increasingly come down squarely on the commercial side of the equation. In the process, its corporate culture has changed dramatically, as has the place it occupies in the private-sector economy.
These changes are only the latest step in the evolution of a public enterprise that predates Canada itself and that has played a crucial role in the development of our nation. The lineage of our postal service extends unbroken from the "coureurs de bois" transporting messages by canoe between settlements, to today's corporation that is Canada's 28th largest company in terms of unconsolidated revenues, and our country's fourth largest employer.
Canada Post's 18,547 retail points of contact make it by far the most widespread and visible federal presence in Canada. Its activities touch the lives of nearly every citizen and every business. Virtually all Canadians receive mail, and most of us still rely on it to one extent or another; for many in rural and remote areas in particular, it remains a vital lifeline. Despite the growing availability of other forms of communication, 84% of Canadians still check their mail every day.1
Much of the change that has taken place at Canada Post constitutes significant progress. As well, the current management of the corporation has a strongly-held vision of its future, and pursues that vision with vigour and determination. This Review was also struck by the sophistication and thoughtfulness of the current labour union leadership, and by their apparent sincerity in wishing to serve the public good while advancing the interests of their membership. The improvement in labour-management relations, from a previous condition which can only be described as toxic, is in itself a major achievement for our postal system.
But change always carries a price, and the exceptionally rapid pace of both external and internal change in recent years has taken a substantial toll on the corporation. Externally, two developments are particularly noteworthy: the emergence of a much more active and dynamic private sector in several fields that were previously the preserve of Canada Post, and the development of a new and more tightly focussed view of the proper role for government and its entities within the economy. Both these developments have the effect of throwing into question the appropriateness of some of Canada Post's current activities. Internally, at the same time, major changes in corporate vision, strategy and culture – particularly since the mid-1980s – have blurred the corporation's public policy focus and given rise to serious problems in terms of both the corporation's results and the appropriateness of its behaviour.
The causes for concern identified by this Review include the following:
· Canada Post Corporation has lost a total of $1.517 billion since its creation in 1982 – including a net loss totalling $154 million in the supposedly more "profitable" period beginning with the 1988/89 fiscal year. Its plans for achieving future financial soundness are unconvincing.
· The corporation has created serious issues of fairness and appropriateness by "leveraging" the network it has built up through its government-granted lettermail monopoly and through past outlays of public funds to compete with private sector companies from a position of strength they cannot match.
· Canada Post has developed such a reputation as an over-aggressive, indeed vicious, competitor that a significant number of Canadians, particularly operators of small businesses, are quite literally afraid of it. Even some of Canada's largest businesses have told this Review, in confidence, that they are afraid to publicly criticize the corporation, for fear that it will use its monopoly position to retaliate.
· Canada Post's strategic vision makes highly questionable policy or economic sense. It's a vision that would require the corporation to spread its activities ever wider through the private-sector economy, farther and farther away from the basic reasons for its existence, in order to make up revenue shortfalls and anticipated (perhaps wrongly) lettermail volume declines.
· Though it invokes "universal service at an affordable price" as its core mission, Canada Post has lost sight of the focus on public service that is the fundamental reason for its existence.
· The corporation is not subject to any adequately effective accountability mechanisms. Neither the Minister responsible for Canada Post, nor any other branch of the Government, nor even the corporation's own Board of Directors has any way of providing the sustained supervision necessary to ensure that its priorities and behaviour are fully consistent with the public interest.
· Canada Post is operating under the constraints of a collective agreement whose provisions – particularly with regard to pay for time not worked, flexibility and job security – are completely out of line with the new realities of today's workplace. The financial consequences of these provisions pose a serious threat to the eventual viability of the corporation and hence to the future of all its employees.
These problems, and others, create a need to adapt to changing realities by refocussing the strategic vision of the corporation, so that it can most effectively serve Canadians in the new circumstances of the present and the future.
In identifying the need for such a strategic repositioning, this Review has been guided by three key priorities:
· ensuring that all Canadians get the best possible postal service at an affordable price;
· ensuring that the postal needs of Canadian businesses are well met;
· ensuring that the functioning of Canada Post is fully consistent with the policy and fiscal priorities of the Government of Canada.
From all three points of view, the need to refocus the corporation is urgent. It is a finding of this Review that the cumulative effect of internal and external changes in recent years has been to create within Canada Post a serious crisis of identity, behaviour, purpose and long-term financial viability. The seriousness of this crisis is not diminished by the fact that it has developed gradually and quietly, outside the sight of most Canadians whose experience has been limited to receiving and sending mail with one degree of satisfaction or another.
The following sections of this report will detail these findings, outline a policy context, and suggest some remedies to ensure that Canada Post will be positioned to give our nation the postal service we are entitled to expect as we head toward the next century.

1Quantitative research conducted for the Review by Decima Research; June 1996.