August 8, 2013 – The federal government should progressively allow new entrants to bid for some of the mail services currently provided by Canada Post, says a report released today by the C.D. Howe Institute. In “How Ottawa Can Deliver a Reformed Canada Post,” author Benjamin Dachis, Senior Policy Analyst at the Institute, notes that Canada Post, a Crown corporation, is facing a future of large financial losses due to declining mail delivery volumes, costly universal service commitments, and mounting pension obligations. Putting more of their services to tender would be a strategy to mitigate such losses.
Further, says Dachis, the government should directly subsidize the cost of obligations it imposes on the mail service, in particular that of maintaining equivalent urban and rural mail delivery prices, says Dachis. This would be a more efficient and transparent way of meeting these goals than cross-subsidization: currently, Canada Post’s urban customers’ mail charges subsidize services in rural Canada.
“Now is the time to put these changes in motion,” says Dachis, noting that with significant looming retirements at Canada Post, reforms such as those he recommends in the study could be implemented gradually, in the context of the existing labour agreements. “It is time that Canada’s postal service caught up with those in the rest of the world,” concludes the author.
Click here for the full report.
For more information contact: Ben Dachis, Senior Policy Analyst, or Finn Poschmann, Vice President, Research, at the C.D. Howe Institute, 416-865-1904; email: cdhowe@cdhowe.org