Cutting back service dramatically and the elimination of home mail delivery, at the same time as a huge increase in postage rates, is not the way to go to improve the postal service in Canada.
Scare stories, reported in the media, about financial losses, declining letter mail and employee pension difficulties are used as justification by senior Canada Post management and the federal government to bring in the unpopular changes. These changes include end of residential mail delivery, the elimination of up to 8,000 good-paying unionized jobs and dramatic rate increases of up to a dollar for basic letter postage.
Many Canadians conclude — wrongly — that Canada Post is a drain on the public purse, with taxpayers bailing out the service annually.
Nothing could be further from the truth.
Canada Post has been a profitable public enterprise; it has returned more than $1.5 billion in profits to taxpayers over the past decade. This was done while having one of the lowest postal rates in the world and only increasing the rates by two-thirds of the rate of inflation for many years, all while paying good wages and benefits to employees.
Only in one year was there a small loss, due to the lockout of employees during a contract dispute. The government interfered with back-to-work legislation dictating a lower wage than even the corporation offered; this did not stop senior management from giving themselves large bonuses.
The Canada Post pension plan is in fine shape compared to most others, regardless of the fact that the corporation took a short contribution holiday in recent years and the federal government kept billions of dollars from the public sector superannuation pensions when it was divided up (billions of which could have gone to the Canada Post pension but was withheld by the federal government and used as general revenue). The pension plan has assets of over $16 billion and is fully funded on a “going-concern” basis.
Although letter mail volume is down, parcels are way up and have set a new record this year for parcel volumes; expectations are for continued growth. Regardless of the biased Conference Board of Canada recommendations for home delivery termination, survey after survey has shown that the general public wants to retain door-to-door delivery, even expand it to those who do not have it.
Management has not properly considered other sources of revenue for the post office, such as postal banking, which we had in this country for more than 100 years and could be implemented again, as the Canadian Union of Postal Workers recommends. Postal banking has proven to be lucrative (over half of revenue generated by the provision of banking and other financial services) in many other countries, even ones with already well-developed financial institutions, such as Switzerland, Italy and New Zealand.
The present alarm about the viability of the postal service and the proposed service dramatic cut backs and increase in rates is unwarranted.
The unpopular new policies for our postal service reminds me of the Mike Harris years in Ontario when the health minister at the time, John Snobelen, confidentially called for the necessity to “create a crisis” in the health care sector in order to justify cut backs. The exaggerated crisis in our postal service is part of an agenda being used to justify a reduction of public services and the slow privatization of segments of it, including in the postal service. Weakening the influence of labour unions is also part of this ideologically driven agenda.
Many private sector, for profit, companies would envy the performance of Canada Post over the past 17 years compared to the way they actually performed during tough economic times. While the postal service is only mandated to function on a self-sustaining basis, it has exceeded that for many years while delivering a valuable public service — which is still much needed.
Alarmism based on worst-case scenarios is driving the negative publicity. All options have not been considered and adequate public consultation has not been implemented.
David Rennie lives in Stoney Creek. He’s a member of Canadian Union of Postal Workers, Local 548 (Hamilton)
first published in the Hamilton Spectator, January 10 2014