A month after postal workers walked off the job, the Government of Canada asked the Canada Industrial Relations Board to order an end to the strike. This may seem like a relief to Canadians, but it is also time to reflect on why the country is forced to suffer such disruptions every few years. How much longer do Canadians have to be held hostage to the whims of a Crown corporation with a monopoly on letter mail?
The strike has caused charities to lose significant sums of money at a time when Canadians are usually feeling particularly generous. For example, the Ottawa Citizen recently reported that the Ottawa Mission, a local homeless shelter, relies on holiday charity mail-outs for donations from a broad base of donors, especially at this time of year. The Salvation Army has also stated that donations are down 50 per cent since the beginning of the strike.
The Canada Post strike could also not have come at a worse time for Canadian small businesses, as this is the season in which their sales are usually highest. Back in November, the Globe and Mail reported that “small businesses, which tend to be dependent on Canada Post because it is a cheaper option for parcel delivery, have warned that a prolonged strike could devastate them financially and could lead to higher costs for consumers.”
This has proven to be correct. I spoke with Canadian small business owner Brynn Deamer, who said that, “Canada Post is the only option for Canadians to send letter mail, all of my Canadian customers must use other parcel carriers like UPS, Purolator, FedEx. So when my customer orders, they must now pay at least $15 for shipping to get their orders on time, which, with my items being an average $10-$40, that type of shipping cost is far too high.”
What happens if a customer doesn’t want to pay $15-$20 for shipping from a small business? “I’m still offering the free Canada Post shipping option, but they have to wait to get their package shipped out until the strike is over,” Deamer said. Even though the strike has now ended, her customers will likely be waiting a long time, as experts are saying that most packages will not arrive before Christmas.
Deamer went on to recount what she has seen happening to other small businesses: “Some are taking the route that I did and are offering other shipping options, and some are all together shutting down their shops temporarily and hoping the strike ends soon.”
Vincent Geloso, a Canadian economist who teaches at George Mason University, recently argued that it might be time to break up the Canada Post monopoly. There is a precedent for this. He gives examples found in Europe, where, as a result of a European Commission directive, “all letters regardless of weight have been open to competition since 2013. The directive does not mandate the privatization of state-owned postal companies; it simply ends postal monopolies.”
Without a monopoly over letter mail, Canada Post would have to compete with other providers like any other company would. Workers could still strike when they felt they needed to, but such strikes would no longer hold Canadians hostage due to the Crown corporation’s monopoly.
Some European countries went even further and privatized their postal systems. As a result, Geloso points out that prices for stamps and other postal services fell by 11 per cent in Austria, 15 per cent in the Netherlands and 17 per cent in Germany over 10 year when adjusted for inflation, with all those countries now having lower prices than the European average.
Before the strike happened, Canada Post was planning on increasing stamp prices in January to try and generate about $80 million in revenue. Now that the strike has added to its financial burden, Canadians shouldn’t be surprised if harsher actions are taken to recoup the Crown corporation’s losses.
The last time Canada Post workers went on strike was in 2018, and it was also timed to coincide with the start of the holiday season. Canada Post’s monopoly allows its union to hold the entire country hostage, especially during the holidays. Without that monopoly, workers could still strike, but it would no longer bring charities and small businesses to their knees. It is time for Canadians to seriously rethink this government-granted monopoly before the next strike hits and ruins another holiday season.
National Post
Sabine El-Chidiac is the Canadian policy associate at the Consumer Choice Center.