Canada Post should deliver service, not profits

Published on January 18, 2014

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