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Canada Post Urged to Privatize Services

A report by the C.D. Howe Institute states that the Federal government should consider “furthering contracting out some postal services, gradually reducing the scope of the government monopoly” at Canada Post.

According to the report, domestic mail is forecast to decline by 27 percent through to 2020 and rural door-to-door service being the most expensive aspect of the post system, costing $269 per address per year. 

It acknowledges that while the network as a whole may be a natural economy, individual parts, such as final delivery and collection of mail or operation of stores, could be privatized.

“Gradually introducing contracting arrangements for more Canada Post services could extend to broader reforms and privatization – akin to the process under way at the Royal Mail – once new competitors are in place and the costs of maintaining the existing universal services become clear,” writes report author Benjamin Dachis. “A gradual approach to removing the government monopoly on postal services, along with financing rural and remote area services through general government revenue, would draw on the most successful elements of the many international reforms to national postal services.”

The Canadian Union of Postal Workers have already expressed dismay at the report, saying it only offers “tired ideas for Canada Post that would result in service cutbacks.”

“Why doesn’t it occur to this prominent private-sector-oriented think-tank that Canada Post should raise new revenue?” asks Denis Lemelin, CUPW National President. “Other postal administrations are bringing in expanded services, and staying viable by doing so. Why is the C.D. Howe Institute so short on innovation?”

CUPW also cites a recent polling of the public which saw 71 percent of the general population opposing deregulating or privatizing postal services.

An earlier Conference Board of Canada study projects that Canada Post will lose $1 billion by 2020.