Once again, a think-tank has waded in with opinions on how to fix Canada Post.
The beleaguered Crown corporation continues to struggle with the challenges of delivering declining mail volumes to an ever-growing customer list. Granted, some areas, such as parcel delivery, are on the increase, but it seems clear that the growth will not be enough alone to stop the corporation from drowning in red ink. The solution proposed by the C.D. Howe Institute is, to be honest, sort of predictable. For several years now, Canada Post has been telling anyone who would listen that the old deal no longer worked.
For the record, that was the arrangement where the postal service got a monopoly on the bulk of mail, and in return was obliged to serve all parts of Canada, the dreaded Universal Service Obligation (USO). The plan was not unique; most postal authorities around the world operated in a similar manner. It made good sense in the days when most people got mail most days, and volumes were in place to make it efficient. Today, that simply is not the case, and it isn’t getting any better. The institute’s solution is pretty simple. Contract out services, offer subsidies to “service providers” in remote areas, and downsize the corporation.
The theory is that postal workers could save their jobs by becoming the lowest bidder in a form of auction. Another option is that, with an estimated 3,000 employees retiring per year, Canada Post can reduce its workforce by nearly half between now and 2021. All it has to do is not hire, shuffle staff from pickup and delivery to sorting as vacancies occur, and contract out the jobs left open. The institute points out the successes of New Zealand and Finland in saving money by making such reforms.
Naturally, the union representing postal workers has a different take on the situation. Even if massive layoffs were not to occur, and all existing staff were guaranteed job security for life, the number of members would decrease. That would not only reduce the negotiating clout of the union, but also its revenues. The union’s solution is to see the company grow and diversify, particularly by offering financial services. There is a precedent in other nations. The union points out that postal operators in France, Italy, Brazil, and once again New Zealand, have expanded into the financial and banking services sector, and that Swiss Post makes most of its money in that manner.
Clearly, as the expression goes, it depends on whose ox is being gored. For its part, Canada Post has initiated a dialogue with Canadians to find out what sort of postal service they want in the future. While some cynics see it as little more than a public relations gesture, the results of such a dialogue should be of critical importance. The think-tank operates from the perspective that mail is becoming less and less relevant to Canadians. The union believes that maintaining the USO is important to Canadians. It is time both groups actually heard what Canadians think.