It’s been more than a week since Canada Post employees began a series of rotating strikes that prompted the reduction of mail delivery to three days a week. And while the strike has created some uncertainty and issues for smaller businesses that have no choice but to rely on the Crown monopoly, most of the rest of us would be hard pressed to notice a difference. The strike is just another chapter in the company’s slow descent into irrelevancy in a digital age of instant communication.
The fact is the volume of mail being delivered in Canada has dropped by half since the start of the strike, which began over wage increases, safe working conditions and the union’s resistance to a modernization that would improve how mail is sorted and delivered for the benefit of customers. The strike has accelerated a trend in Canada that has seen a 17 per cent drop in mail volumes over the past five years as the service finds itself on the losing end of digital communications with email replacing snail mail, online billing and payments taking over for envelopes in the mail box and couriers filling in the gaps in between. The union seems oblivious to this changing landscape, seeking wage hikes of 11.55 per cent over four years and even rejecting the corporation’s latest top wage offer of $26 an hour.
Canada Post might have made $281 million last year, but that’s a misleading figure in light of the challenges like its ever-expanding delivery network despite the mail volume shrinkage. Meanwhile, the corporation faces a massive uphill challenge in a $2-billion modernization to update its antiquated mail processing equipment, not to mention a $3.2-billion shortfall for its pension plan. The Crown corporation also has to contend with worker problems like a staggering 16 days lost to absenteeism per worker, on average, in 2005 — 60 per cent higher than the Canadian average for the manufacturing sector, according to a CD Howe Institute study.
And while both sides look to put their own stamp on a final resolution, it’s time for the federal government to give serious consideration to ending Canada Post’s monopoly on mail delivery. Privatization is a growing trend across the globe where countries like Germany, Austria, the Netherlands and even the United Kingdom have gone that route or are in the process. While privatization would lead to higher productivity, improved costs and service for customers, it’s clear it wouldn’t be an easy fix. The U.K.’s efforts to privatize Royal Mail (led by former Canada Post chief Moya Greene) could cost CDN $2.7 billion as taxpayers bear the brunt of its debts, not to mention a CDN $13-billion pension problem that’s even bigger than in Canada. When looking at Canada Post’s aging equipment, massive delivery network and expensive labour force, one has to wonder what kind of private company would be crazy enough to take on that kind of albatross.
Selling off Canada Post wouldn’t be an easy sell, but opening up mail delivery to competition potentially could be, just as opening up the telecommunications sector resulted in improved service and cheaper phone and cellphone bills. Sweden and New Zealand still have public mail services but allow private sector competition. According to the Montreal Economic Institute, the latter reduced its workforce by 40 per cent, mostly through attrition, which 10 years later resulted in 30 per cent savings on stamps. In Canada, competition would force Canada Post to innovate and reduce costs rather than returning to taxpayers, hat in hand, to subsidize its unjustifiable monopoly in the 21st century. The alternative is for Canada Post and its unionized workers to continue on a very costly path toward irrelevancy. Wake us up when the strike ends.
