Crown corporation faces future of financial loss, delivery decline, costly services
After its failure to deliver profits, Canada Post should privatize, urged the latest report from the C.D. Howe Institute.
On Aug. 8, the Toronto-based think tank released “How Ottawa Can Deliver a Reformed Canada Post,” and recommended that privatization would breathe new life into the white elephant.
In his report, author Benjamin Dachis noted the Crown corporation is facing a future of large financial losses because of declining mail delivery volumes, costly universal service commitments and mounting pension obligations. Contracting out some of those services would ease those pressures, according to Dachis, who estimates that Canada Post will have an annual operating deficit of $1 billion by 2020 if changes aren’t made.
The Canadian Union of Postal Workers (CUPW) slammed the report, saying it only offered dated solutions that will lead to service cutbacks.
“The C.D. Howe Institute was making the same case for deregulation and privatization in 2007, while Canada Post was making profits,” said Gayle Bossenberry, national vice-president at CUPW. “These are tired old ideas, not viable solutions for a valuable public service.”
CUPW pointed to France, Brazil and New Zealand, where postal services have reportedly expanded into banking and financial services to address some of those same challenges.
But even the Crown corporation itself recognized that it stands at a crossroads.
“With the relentless decline in lettermail resulting in ongoing financial losses at the corporation, fundamental changes are needed to transform the business,” said a statement from Canada Post, adding that the report provides further reflection on the matter.
Thus far, Canada Post has hosted 36 roundtable discussions on the company’s future, with the next round set for the end of August and beginning of September.