National Column: Canada Post reforms a start, but will need more serious thinking

by Thomas Walkom

The federal government’s planned postal reforms are vague and, in themselves, unsatisfying.

But they keep Canada Post’s home mail delivery service alive and, if properly addressed, could provide the basis for a system that works.

Of the reforms announced last week by Public Services Minister Carla Qualtrough, the one that received most attention was the decision to let roughly 4.2 million households keep door-to-door mail delivery.

Canada Post had planned to eliminate home delivery entirely as a cost-saving measure. But it managed to convert only 830,000 of five million households to so-called community mailboxes before Justin Trudeau’s Liberals were elected to government

Since the Liberals had run on a platform to save home delivery, the Crown corporation wisely put a moratorium on conversions until the government figured out what it wanted to do.

Last week the government finally did so. Qualtrough announced that the moratorium on new conversions would become permanent but that the 830,000 who had already lost home delivery would not get it back.

That decision was in line with the careful wording of the Liberal campaign platform. But it did not match a more extravagant election promise made by Trudeau when he pledged to “restore” home delivery to all those who had lost it.

Nor did it match the compromise recommendation of a Liberal-dominated Commons committee, which
urged the government to restore home delivery to the 350,000 households that had lost it since Aug. 3, 2015, the day the last election was called.

Qualtrough did not specify how Canada Post would make up the roughly $350 million in annual cost savings it had hoped to achieve from its now-defunct conversion program.

But she did order the Crown corporation to look at new money-making ventures. In particular, she urged Canada Post to promote one of the financial services it already offers – sending remittances, or money orders, abroad.

Remittances, which allow residents to transfer money to their relatives overseas, are a big business in high-immigration countries like Canada.

Qualtrough didn’t take the next logical step and order the Crown corporation to reinstate full-scale banking services, which until 1969 the post office had been authorized to offer.

But she did tell Canada Post to look at how other mail services make money.

In several countries, including Britain, France and New Zealand, postal banking is an important revenue generator. But Canada Post has always rejected the idea for this country, arguing that the existing banking system is so good that it leaves no room for competitors.

Customers of the big banks might disagree. Certainly, the post office’s ability to operate a $1-billion money-order business in competition with the banks indicates that they can’t be that good.

Those looking for a detailed blueprint from Qualtrough’s announcement are doomed to disappointment. It’s hard to know, for instance, whether her suggestion that Canada Post use its national network “to enhance access to government services” in rural and remote areas means anything more than sharing rent with the local Employment Insurance office.

The announcement says nothing about Canada Post’s massive pension deficit, nor does it respond to the Commons committee suggestion that this problem be fixed by exempting the Crown corporation from pension solvency rules designed for the private sector.

Still, the government has come up with some useful principles:

First, even in the age of email, the post office performs a necessary function.

Second, Canadians want to be able to send and receive letter mail and will not put up with radical cutbacks in service.

Third, Canada Post has to think creatively about new revenue sources, even if this means doing something different.

Fourth, Canada Post management must do something to fix a relationship with its unions that is too often poisonous.

Overall, this is far from a comprehensive solution to the problems afflicting Canada Post.

But with luck, it’s a start.

Thomas Walkom appears Monday, Wednesday and Friday.
Copyright 2018-Torstar Syndication Services

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