Is it possible that Canada Post went on strike and almost no one noticed, let alone cared?
I certainly don’t. In fact, my life has significantly improved since postal workers went on strike late last week. On a normal afternoon, my front hall would be littered with junk mail that a letter carrier stuffed into the mail slot, but last Friday, the hallway was empty.
On Tuesday afternoon, I found a package lying at the foot of my door, but again, no coupons or real estate ads for me to transport to the recycling bin. In the evening, I spoke to a friend who was unaware of the postal strike, showing how little it matters to most Canadians.
A government department throughout most of this country’s history, Canada Post was spun off into a Crown corporation with a government-granted monopoly on delivering letters in 1981. That was also the year the first IBM Personal Computer hit the market.
Since that time, technologies such as email and electronic banking have made the letter carrier largely superfluous. According to Canada Post’s latest annual report, Canadians received an average of only two letters per week last year, down from seven in 2006.
Due to the strike, I will likely have to wait a little longer to get my new credit card, but my bank gives the option of adding it to a mobile wallet before it arrives. Government benefit cheques will continue to be delivered, but could also be replaced with direct deposits if that weren’t the case.
In fairness, some Canadians will be impacted by the strike — namely those in rural and northern communities where private couriers find it unprofitable to operate and residents benefit from shipping rates that are subsidized by city-dwellers.
People who run small, often home-based businesses peddling wares on sites like Etsy and Shopify have also taken to social media to express their outrage over a strike that was timed to correspond with the busy holiday shopping season. But eventually, they’ll realize that companies like UPS and FedEx offer similar services, as do discount couriers like Sendle and Chit Chats.
So, too, for that matter, does DHL, the multinational that has run the German postal service, Deutsche Post, since it was privatized in 1995. In recent years, DHL has greatly expanded its global footprint, including its 2016 acquisition of UK Mail, a private postal service that competes with Royal Mail in the United Kingdom’s deregulated postal market.
Last year, DHL reported a net profit of 3.935-billion euros (C$5.8 billion). This contrasts sharply with Canada Post, which lost $748 million in 2023, and nearly $500,000 in the first half of this year.
Between 2018 and 2023, the Crown corporation managed to lose $3 billion. It has outstanding loans totalling $1 billion and expects that, in the absence of serious reforms, it will need to take on an addition $1 billion a year in debt for the foreseeable future to “maintain operations and meet our employee obligations.”
What’s amazing is that the Canadian Union of Postal Workers looked at this bleak financial picture and said: What can we do to make the situation worse?
The union is demanding a whopping 24 per cent pay increase over four years, along with a host of other benefits, including higher short-term disability payments, more paid sick days, as well as paid meals and breaks.
The question is: whose going to pay for all this? Canada Post doesn’t receive government subsidies, other than to provide free material to the blind and offset the cost of postage-free letters sent to government officials. But if the corporation keeps accumulating debt, there may come a time when the federal government is forced to bail it out.
It does have the option of raising rates or reducing service, but that will incentivize Canadians to rely more heavily on online communication and banking.
Any increase in its parcel rates will likewise cause the postal service to lose ground to its private competitors, which are already cleaning its clock: since the pandemic, Canada Post’s share of the package delivery market has dropped from 62 per cent to 29.
To become more competitive, the corporation is looking to expand package delivery on weekends, but the union wants to make this less profitable by forcing Canada Post to use full-time staff rather than contract workers.
Another potential solution would be to have community mailboxes replace door-to-door delivery, but that plan was killed by the federal Liberals, who campaigned against it during the 2015 election, before it was completed.
Which leaves few good options aside from privatizing the letter carrier, as Germany did with Deutsche Post 30 years ago, and getting rid of Canada Post’s monopoly on delivering letters so other companies can compete in the space.
Canada Post has already begun this process, selling off its third-party logistics business to a Montreal-based company and its IT services division to Deloitte earlier this year. It’s unlikely that Prime Minister Justin Trudeau would see this privatization process through to fruition, as it would mean taking on the government letter carrier and its union, but this is an issue that the Conservatives can, and should, take on during the next election.
Canada Post is an antiquated institution that clearly can’t compete with the private sector. And repeat strikes — this is the third time letter carriers have walked off the job since 2011 — certainly don’t give it the reputation of a trusted partner in an era in which businesses are increasingly reliant on e-commerce.
It’s time to free the post before the Crown corporation’s mountains of debt come back to bite taxpayers in the butt.
National Post
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