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MP REPORT: Canada Post evolving
Technologies are changing faster than most of us can understand, let alone adapt to. Banking, social media, and communications have changed the way we live. Canada Post is one service provided to Canadians that technological advance has affected.
Canada Post is a Crown Corporation operating at arms-length from the Government of Canada. In 2011, for the first time in 17 years, Canada Post failed to earn a profit and reported a loss of $327 million before tax. In 2012, Canada Post would have had a loss of $54 million if not for the new collective agreement signed with its largest union in the last weeks of the year. The Conference Board of Canada projects Canada Post’s annual operating deficit to be close to $1 billion by 2020.
So why is this? Well, technology. People are just not using paper mail as much. In fact in 2006 Canada Post delivered five billion pieces of domestic letter mail and by 2012 this rapidly dropped to four billion. Letter mail is 51 per cent of revenue and Canada Post’s most profitable product. Canada Post’s top 200 customers account for 45 per cent of its revenue.
In 2012, the U.S. Postal System lost US$15.9 billion, more than triple its loss of the previous year. In 2013 the taxpayers of the U.S.A. are subsidizing their postal system by $25 million per day. The Government of Canada has no intention to subsidize Canada Post with taxpayer’s money.
The Conference Board of Canada has proposed some actions to Canada Post for their consideration. Here are just a few: converting Canadian households’ door to door delivery to community mailboxes, reducing speed of delivery, price increases, rural mail delivery to alternate day delivery, further replacement of corporate post offices with franchised postal outlets, and ensuring wage restraints are implemented.
These recommendations have not been implemented by Canada Post but they are reviewing the options. Just as banking today has changed significantly from a decade ago, Canada Post will need to adapt to continue to provide mail delivery to Canadians in a cost-effective model.
I am offering this information to you to prepare you for the inevitable changes to Canada Post on the horizon. This is not the government’s fault; it is simply a result of the evolution caused by technological advancements we all use.
Colin Mayes is MP for Okanagan-Shuswap