“Big changes” needed at Canada Post, claims new report

“Big changes” needed at Canada Post, claims new report

A new report has argued that federal government needs to “deliver big changes to Canada Post”, because “incremental reform will not save Canada’s beleaguered mail carrier”. In a new paper for the Macdonald-Laurier Institute, Professor Ian Lee from Carleton University’s Sprott School of Business, has argued that “tinkering around the edges” will not be enough.

The “big changes” that Professor Lee advocated include: replacing all door-to-door mail delivery with community mailboxes (a policy which Canada Post is already begin to follow, although it has not yet gone for a 100% switch); reducing the number of days on which mail is delivered; franchising rural post offices; and eliminating Canada Post’s monopoly on mail delivery.

Professor Lee maintain that these changes will deliver “a ‘bridge to the future’ to facilitate CPC’s transformation from a highly regulated mail delivery entity with prices set by government to a competitive parcel delivery entity with prices and service determined by market conditions.”

Of course, many of the changes have already been tested out in other countries, whch have all been grappling with the need to redefine the postal Universal Service Obligation (USO) in a world of declining physical mail and fast-developing digital technology.

In Canada, the volume of mail per address dropped 30% between 2006 and 2013, even as the number of addresses grew by 1.3 million. The growing use of the Internet for communication and financial transactions will only reduce this further, according to Professor Lee.

The report claimed that door-to-door delivery costs more than twice as much as servicing community mailboxes, and only 32% of Canadians still get this level of service.

“Many households that still receive door-to-door delivery are located in relatively wealthy urban neighbourhoods such as Shaughnessy in Vancouver, Rockcliffe in Ottawa, the Annex in Toronto and Outremont in Montreal, making it both an issue of fairness and substantial cost savings,” according to Professor Lee.

In addition to switching to community mailboxes, Professor Lee advocated reducing the number of days on which mail is delivered to households to three – and also “opening up Canada Post up to competition by eliminating its monopoly on mail delivery”. Both these “big changes” have, of course, been tried out in other countries, to mixed reviews.

Interestingly, given his support for deregulating prices and liberalizing the market, Professor Lee does not advocate privatization. He maintained that “this will not fix the corporation’s structural problems and the business model is so poor that no private sector organization would want to take it on anyway”.

As previously reported, Canada’s postal workers unions have been organized a series of roadshows in a bid to gather public support for their campaign to preserve the door-to-door mail delivery service.

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1 Comment

  1. devin21

    Same old song: “let the market figure it out.” Mail delivery is a public service not a marketable commodity. The market is not infallible and definetly isn’t appropriate for public services, that’s been proven so many times. And you’re dreaming if you think the motive behind this report is to improve the post office. It’s to privatize it amd extract the profit from it, they want the profit that currently goes to everyone. If the intent was to improve the post office they would be advocating for postal banking. That’s the solution and has been proposed by the Canadian Union of Postal Workers. The union also discovered Canada Post was actively researching postal banking as a way to make new revenue but the project was abruptly killed for no apparent reason. But they make no mention of that of course.

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