Canada Post defeats NAFTA unfair competition challenge from UPS

Canada Post has defeated a NAFTA challenge from United Parcel Service of America Inc., that alleged the Crown corporation engaged in unfair competition, bringing an end to a seven year-old dispute between the two delivery companies.

UPS, the world’s largest package delivery firm, launched a claim for US$160 million against the Canadian government in April 2000 under the North American Free Trade Agreement.

UPS contended Canada Post has an unfair advantage because its services such as Express Post and Priority Courier draw on an infrastructure of sorting facilities, mailboxes and post offices that private companies must provide for themselves.

But Canada Post CEO Moya Greene told the company’s annual meeting Tuesday that the NAFTA tribunal hearing the challenge had dismissed it.

The company, which has been operating in Canada for more than 30 years, is still reviewing the decision, Kane said.

Officials with NAFTA, the International Trade Department and the two companies said copies of the decision weren’t yet publicly available.

Union officials representing Canada Post workers said the case represented the first time Ottawa was being pressured to withdraw from an established government program or service, and if it had succeeded, may have forced the company to get out of the courier business altogether.

Earlier at the Canada Post meeting, Greene said the company will likely raise postage rates for certain categories of mail such as parcel delivery.

A decision whether stamp rates will change for letter mail is expected by the end of the month.

The Crown corporation generated $7.3 billion in operating revenue last year, up 4.6 per cent from the previous year, and earned $119 million in net income, down 40 per cent from 2005.

With 72,000 staff, Canada Post is the country’s sixth largest employer. It delivers 40 million pieces of mail daily.