January 29, 2014

Alternatives to Post Office cut

Be careful what you wish for. The Canadian Union of Postal Workers (CUPW) urged Canada to turn the Post Office into a crown corporation, at arm's length from the government. Well, a crown corporation is what they and all of us got, beginning in 1981. Big mistake.

CUPW saw their relationship with Canada Post as a crown corporation as more similar to normal company-union interaction, rather than government-union.  What they really got was government-union relations with the corporation doing the government’s dirty work.  Their approach made Canada Post more business-like, rather than seeing the post office as a social utility.  Businesses are supposed to maximize profits and cut losses, while social utilities are not expected to be self-supporting.  The public schools, fire department, and the police are not profit-making enterprises.  Postal services should be more like them, not like Canadian Tire or Walmart.  Canada Post CEO Deepak Chopra justified his draconian measures by telling us, “Look, we have a business to run.”

The decline in the volume of mail is due to technology, the fax machine and the internet.  Back in the 1970’s and 1980’s, CUPW might not have foreseen the situation we face in 2014, but even then they were looking for ways of expanding the post office as a social utility.  Some of their ideas still have merit, and if implemented they would serve to make the organization more sustainable, even from a business point of view,  avoiding the gloomy future that Chopra wants to present us with.  So let’s review what he wants to do.

The plan is to eliminate all home delivery, replacing it with group mail boxes, making Canada the first G7 country with no home delivery.  As Canada faces a population which has a growing aged demographic, Chopra, Canada’s own Walter Mitty, is pursued by mobs of senior citizens demanding group mail boxes so they can get their daily exercise en route to pick up the mail.

Chopra will also raise the cost of a single stamp to a dollar.  HST is additional.  Of course, the elimination of home delivery will also make possible a reduction in the work force, with 8,000 positions to be cut over the next years.

These measures are meant to address a financial situation including a loss of $25 million in 2012 and an unfunded pension liability of $6.5 billion.  Are their alternatives? 

Of course the first thing to say is that the post office needs to be seen as a service, not a business.  Then, there are things that could both mitigate the financial situation while providing Canadians with benefits.  One idea that CUPW and others have floated is a postal savings system.  This would provide a financial service available through postal outlets and through the postman, a service particularly valuable in more remote areas lacking other financial services.  Specialists could be called upon to provide in-home service for more complex transactions.

Many years ago, CUPW instituted a letter-carrier alert program on a voluntary basis.  Posties kept an eye on the frail and elderly.  When their mail was unclaimed over a period of time, they would inform local authorities to step in to make sure everything was all right.  This kind of service is found in Scandinavia.  While a letter-carrier alert may be rejected by government as outside of federal responsibility, what is to prevent Canada Post from contracting with provincial and municipal governments and with social agencies?

Then, there are delivery service add-ons that could be instituted.  If a letter is returned because of as wrong address or other such reason, a service could be provided for a fee so that an effort would be made to find the correct address, to deliver the letter or package and to provide the sender with the correct address.  The fee could vary depending on the degree of work involved in finding the information.

Canada Post is currently experimenting with same-day delivery of parcels from retailers in some cities.  This program should be expanded.  And since the internet and fax are responsible for the massive decline in mail volume, Canada Post should add more services related to this technology.

Currently, Canada Post has an e-Post service which handles bill payments and storage of bills.  It could add other internet and fax services.  For example, it could operate or take place in internet cafés, where internet, fax, and a variety of other postal services could be available, including the proposed postal savings program.  It could also supply internet and fax services in other locations, such as hotels and motels and shopping centres.