Canada Post should deliver service, not profits

Randy Simms
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At some point in the next three to five years, I’m going to lose my door-to-door postal service. Sympathy for my loss may be hard to come by. Still, as users of the postal service, we should be concerned with Canada Post’s plans.

The corporation says it’s time to make big changes to its business model or it won’t be sustainable. Dropping home delivery to save money is the low-hanging fruit, if you will, because a lot of Canadians don’t get home delivery anyway and they won’t complain about its disappearance. Those of us who have it, have long lived with the knowledge that it was going to go the way of the dinosaur someday. Canada Post says that day has arrived.

The corporation says it’s losing money.

Revenue reportedly dropped by over $20 million in the first three quarters of 2013. The average cost of delivering mail to a single address, day after day for a year, is $269. The cost of dropping mail at pickup points like super-mailboxes is $117.

Canada Post says it will face a $1-billion deficit by 2020. Worse still for the corporation is the fact that the quantity of mail is going down. God bless the Internet.

The Conference Board of Canada says we can expect a further 25 per cent drop in mail volumes over the next seven years. If you look at it from Canada Post’s point of view, there’s no choice but to cut door-to-door delivery. It will mean the loss of 8,000 good jobs, but a lot of people are slated to retire over the next five years, so the hit to employees will be negligible. Those staffers will simply not be replaced, and that will mean big savings for the company. Add to that the decision to increase first-class mail costs as of April 1, and the drive toward eliminating home delivery accelerates.

The folks responsible for providing the mail service, — the federal government — are totally in favour of these moves. Transport Minister Lisa Raitt says, “the Government of Canada supports Canada Post in its efforts to fulfil its mandate of operating on a self-sustaining financial basis,” adding these actions will “protect taxpayers” and “align Canada’s postal services with the choices of Canadians.”

This is nonsense. First of all, Canada Post is supposed to be a public service provided to taxpayers by the government, and making a profit has no real role in meeting its mandate.

Consider Marine Atlantic by way of comparison. Imagine if making the ferry service profitable was its goal. Imagine the hue and cry if Raitt were to say of Marine Atlantic that the government applauds its efforts to be self-sustaining by doubling the price of a ticket.

We would quickly argue that the ferries constitute a public service, and not a profit centre. That same argument can be applied to Canada Post.

Recouping costs is all well and good, but to postulate that these corporations must make a profit to protect the interests of taxpayers is a stretch. Adding to the myth is her view that these moves are in line with the “choices” of taxpayers. I know of no one who likes super-mailboxes. The choice of Canadians, if we had a choice, would be home delivery.

Canada Post intends to jack up the price of a first-class stamp this spring. As of April, a book of six stamps will cost $5.10 at 85 cents apiece, while a single stamp will cost $1. Increasing prices in the face of declining demand only makes sense if you intend to get out of the business.

By the way, Canada Post makes a lot of money from its parcel service and ad mail divisions, but no one would suggest using profits from there to subsidize door-to-door delivery. In the corporate world we’ve embraced, such a suggestion would be totally un-Canadian.

Randy Simms is a political commentator and broadcaster. He can be reached at rsimms@nf.sympatico.ca.

Twitter @RandyRsimms

Organizations: Canada Post, Internet.The Conference Board of Canada, Marine Atlantic

Geographic location: Canada

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Recent comments

  • Alan Morris
    January 27, 2014 - 17:32

    My wife and I are 82 yrs old I am a paraplegic and cannot take a walk down the street to get our mail, we do not under stand the computer system to pay bills and banking this is not fair to the elderly or shut ins

  • Grand Banker
    January 21, 2014 - 06:28

    Randy - in my opinion, you have missed the mark on this one. This issue is not about delivering profits - it is about how we have changed in the manner we communicate - and how this change has impacted letter postal service operations/volumes. The reality is that the letter mail service business is in decline and this is expected to continue. This decline is due to the emergence and overwhelming public acceptance and usage of electronic communications. This not an issue that can be slowed or reversed by a Canada Post pricing strategy. Traditional mail letter volumes will continue to decrease even if the service was provided free of charge. This traditional mail service does and cannot compete with the electronic communication which is available real time, cheaper and more convenient - it is a battle that has been lost and to compound this by continuing to incur the costs associated with a door to door service for a limited number of Canadians becomes very difficult if not impossible to support. To suggest that other profitable operations such as the parcel service be relied on to support a dying service is an irresponsible use of resources - not to mention addressing the larger issue of where will the dollars come from to help resolve Canada Post's unfunded pension liability of some $6.5 billion. Your comparison to Marine Atlantic would only make sense if the circumstances were the same or similar - this is not the case. Yes. while Marine Atlantic is a public service, it stops there, given it does not have a competing service that is cheaper, faster and more convenient and was being embraced by the vast majority of the public. If this were the case - similar to Canada Post - I think that taxpayers would expect or demand that the Federal Government act in a prudent manner towards ensuring "value for dollars/services"

  • Look it up
    January 20, 2014 - 14:33

    Canada Post is not broke. They simply made less this year than last year. They are not running in the red and haven't in years. Look it up. All of this is just a scam to make it appear that Canada Post is failing, so they can continue to privatize our postal service, gut the union jobs for contractors, and replace the retail stores with those you see in places like your local drug store where the employees make minimum wage, and bare minimum security clearance.

    • Grand Banker
      January 21, 2014 - 05:12

      If they are not broke and/or losing money - how do you rationalize the financial impact of Canada Post's $6.5 billion unfunded pension liability?

  • Jeremy
    January 20, 2014 - 12:37

    If you want me to campion for you to keep door to door, are you going to campaign for me to start getting door to door?

  • Stephen
    January 20, 2014 - 10:11

    I have Door to Door, I have no problem with them changing this service to a community mail box. I have no problem with this because I don't want to have to pay more money out of my pocket in taxes to subsidies the postal service the age of mail is going and will be gone soon.. already every company the sends you a bill printed is offering incentive to stop receiving by mail this bill. I do agree that the postal service should be Profit Neutral.. in that it should not make a buck.. But it should not cost a buck as well. But it should not be a service that pays dividends to investors.. every dollar made by this company from any of it’s divisions should be re-invested back into the people, business

  • Xmas treason
    January 19, 2014 - 10:08

    Canada Post is being butchered up for privatization, like Nalcor. CUPW think a 12' inflatable piggybank is a solution, and hides behind it as CPC management wreaks things and sinks morale. Wasting money toward an end is what Nalcor and Canada Post are doing, Ed and Deepak are not allowed to speak - suit dummies following script. Nalcor engineers bite their tongues for a pay cheque, after all, their comfort is looked after, new vehicles, new HVAC systems for the building - LEED energy. WOW. The past few years have been like cheque day for the white collar welfare recipients. Self fulfilling prophecy, perpetuated by augury from conservative bought "nonpartisan" think tanks and MUN stooges. The CPC executive management is psychologically busting the union, Nalcor is busting the citizens of this province. They both created artificial bluster around the Xmas season. Treason.

  • Michael
    January 19, 2014 - 04:58

    Randy, This is all well and good, that is if you provide door to door mail service in all urban areas. I live in Paradise on a 60 foot wide lot. Our houses are the same distance from each other yet we get worse mail service than a resident of St. John's or Mt Pearl. A simple solution here is to give all tax payers the option to either pick up mail via the community box or pay the extra $200 per year or whatever it costs for full service. Otherwise, i applaud the efforts of Canada Post to provide the same service to all taxpayers.

    • Jeff
      January 19, 2014 - 12:42

      We don't have a health clinic where I live. I don't think you should either unless you pay a premium.

  • PHILIP C.
    January 18, 2014 - 22:29

    I,AGREE WITH WHAT MR.SIMM*S SAID,CANADA POST... DELIVER SERVICE NOT PROFITS ...YOUR RETORIC JUST DON*T WASH MR. HARPER., WITH THE PEOPLE OF CANADA...YOU WORK FOR US THE CANADIAN PUBLIC...SEE YOU AT THE BALLOT BOX...UPALONG.

    • saelcove
      January 19, 2014 - 10:07

      Any luck at all cbc will be next

    • Harry
      January 19, 2014 - 13:32

      Hey, Philip, Who will you blame for the sun being not so hot as expected this year, the PM or the Premier? BTW, I have to travel 13 kms to get my mail.