This article contains the following sections:
- Money Talks: Dollars and Deceptions
- Transition Time: Letters versus Parcels
- More Services, Reasonable Prices: A Better Business Strategy
- Home Delivery: Thinking Outside the PO Box
- Madness to the Method: Fixed and Pre-Determined Results
- Intentional Anti-Solution: Corporate Favouritism, Privatisation
- Links and Sources
Old news. Canada Post dropped a bomb of an announcement over our heads last month — the price of stamps will be rising dramatically, home delivery is being phased out, and approximately 8,000 workers will lose their jobs, allegedly through attrition.
By now, many people have likely moved on to the next scandal and accepted Canada Post’s proposed changes as passé. But don’t let go of that righteous anger just yet — there’s more to this story than meets the eye.
Let’s not forget 2011 was the year of the lockout. Canada Post hurt itself in that situation. It wasn’t open for business as usual because of its own decisions — that is, the manipulation of its unionised employees. Three years later, Canadians shouldn’t have to suffer the injustice of compensating the company for its own mistakes. We already paid for that blunder as it was happening.
So, Canada Post’s operating costs and decreased revenues weren’t the reason for the 2011 loss, and they haven’t affected the company all that much since. One of the reasons Canada Post gave for presenting its Five-point Action Plan last December was because a Conference Board of Canada report predicts the company will lose close to $1 billion dollars annually by 2020. As the Canadian Union of Postal Workers refutes, that “figure was based on the assumption that Canada Post would lose $250 million in 2012. In fact, the corporation earned $98 million in profit before tax.” 
Canada Post has “returned more than $1.5 billion in profits to taxpayers over the past decade.”  How could it do that if it was losing money? Never mind that, the company did it all the while “having one of the lowest postal rates in the world” and “paying good wages and benefits to employees.”  Oh, and while paying incredible sums to its senior management — over $10 million in salaries to the CEO, presidents, and vice-presidents annually, not counting bonuses and perks.
Canada Posts's pension crisis is manufactured, and its financial situation not as dire as it seems. Click To Tweet
Armine Yalnizyan, an economist for the Canadian Centre for Policy Alternatives, says that “Canada Post’s pension fund (one of the biggest in Canada, with assets over $16 billion) is not in deficit and is fully funded on a going-concern basis.”  This, says David Rennie, “regardless of the fact that the corporation took a short contribution holiday in recent years and the federal government kept billions of dollars from the public sector superannuation pensions when it was divided up.” 
“But,” says Yalnizyan, “if Canada Post shut down next year, it would face a $6.5 billion solvency deficit.” That’s why Canada Post says it’s got problems with its pension fund — it would be true if the company went bankrupt. As Yalnizyan points out, however, “there is no chance of Canada Post going bankrupt, which is why Finance just waived its obligation to make special payments for the next four years.” 
The company’s supposed pension crisis is a manufactured one, and its financial situation as a whole is not as dire as Canada Post would have it seem.
On the other hand, people are sending and receiving more parcels “because of the rise of online shopping.”  In mid-December 2012, Canada Post achieved for the first time the delivery of one million parcels in one day, which represented an increase of 11 percent over the previous year’s busiest day.  The same record was reached again one week later. 
And 2013 was even better. There was a 20 percent increase in domestic parcel deliveries during the last weeks of November and the first weeks of December, compared to the same period last year.  The million-parcel milestone had already been reached four times by December 9, and “additional million-parcel days were expected during the holiday season.” 
The company nonetheless says that processing more parcels isn’t enough to make up for the reduction in letter mail.  And yet, it acknowledges that it is in a period of transition and that it has lately invested in its future: “In recent years, Canada Post has made unprecedented investments in new equipment to enhance the end-to-end online shopping experience.”  As a company representative says, “We are successfully repositioning Canada Post to serve the emerging needs of Canadians. Our investments in modern equipment, flexible and motorized delivery methods, Community Mail and Parcel Boxes, and enhanced tracking […] are paying off.” 
If things have gotten better since these investments were made, why isn’t the company adopting strategies that would allow it to adapt during this transitional period? After all, the value of physical goods purchased online for residential delivery in Canada is forecasted to reach $15 billion by 2016. 
In addition, even though people send and receive less mail now, their mail is still important. Residential deliveries include statements, bills, cheques, tax documents, and more. Yes, a lot of people now do those things online, but one thing hasn’t changed: government-issued cards, licences, and documents are sent through the mail. So are insurance certificates, many contracts, forms, and applications, and all kinds of other important documents.
To illustrate, take this example of how online banking can be challenging for some Canadians. Some online banking systems do not allow for the transfer of funds between accounts held by different institutions. Others allow for the transfer-in but not the transfer-out of funds between institutions. Yet others allow for both. Some credit unions do not offer email money transfers. If someone holds accounts at two different institutions, transferring funds between their own accounts can be a real pain; transferring funds to someone else can be even harder.
Another example shows how paper can be needed in the process of getting set up to make online transactions. The void cheque is still the first form of proof required when providing account details. Employers ask for them to authorise direct deposits. So do companies taking pre-authorised payments from client accounts. Online banks require cheques to establish a link and enable transactions between online and physical accounts. While some banks print small amounts of cheques on-location, and others allow printing a void cheque directly from an online account, most banks no longer print cheques on-location — they are often ordered in bulk and delivered, either to the institution for pick-up or by mail.
But none are needed. Canada Post itself says that it is managing less letter mail “with more valuable items, [which] include credit and loyalty cards and government-issued cards and licences.”  It asserts that “this shift provided clear direction to Canada Post and the many businesses looking to redefine customer experience in an increasingly digital world.” 
Yet, many businesses are displeased with Canada Post’s announcement. An article in the Business section of the Financial Post states that “few people realise how important letter mail is as a means of sending invoices and receiving payment between businesses.” 
Tellingly, the article reasons that “electronic invoicing and payments in Canada, while improving, is still in its infancy. Due to the incredibly high cost of credit card payments, many companies still prefer to mail out paper invoices and cheques to collect and pay. Cheques represent 46 percent of all payments.” 
And, says the article, “Canada Revenue Agency still views hard copy invoices as the best defence in an audit.”  So not only do individuals and businesses continue to operate on paper, at least to a certain extent, but the government itself prefers it.
These important documents are all going through the mail, along with all the parcels Canadians are ordering online. Canada Post is just as relevant today as it always has been, then.
Regrettably, the company is currently ringing the alarm bells because, in admitting “the difficulty of accurately forecasting the pace at which letter mail volumes will erode, Canada Post has factored in significant erosion.”  Perhaps the company has underestimated the importance of Canadians’ mail. There’s a limit to how much erosion can realistically be possible over the next five years.
Indeed, Canada Post could offer a much wider range of services to help resolve its cash flow issues. The company says that “with the historic shift away from paper-based communications, the Corporation’s current business model does not allow it to achieve sufficient profitability and cash flow to support its operations.” Creating new means of earning income through added value would be a much better way of solving this problem than raising prices, cutting jobs, and slashing services.
Canada Post also claimed in November 2013 that “based on current financial projections, Canada Post believes it will require additional liquidity by mid-2014.”  No wonder the price of stamps was set to rise as soon as the end of March! But as we’ve seen, these financial projections are based on incorrect analysis, and the federal government has approved pension relief payments which resolve the urgent need for liquidity.
Still, say for a moment that the company really had needed cash by June. Couldn’t more temporary measures be taken to ease the transition period and mitigate the situation while the company develops a more appropriate action plan? Much more importantly, how is it that the company only gave itself seven months to solve this liquidity problem? It’s been saying for years that things have taken a downward trend, and yet it was unable to foresee running out of cash? Hogwash.
But why can’t it at least delay the new changes, especially the price hike, until it has the opportunity to explore other options? The ideas most being suggested to help Canada Post pull through this transition period are expanding postal financial services and providing internet services.
Offering internet services can be an asset to the company’s other established and potential services. Canada Post’s parcel delivery has increased thanks to the internet. At the same time, delivery of letter mail has decreased for the same reason. Canada Post has already harnessed the internet’s power to track deliveries, and it didn’t seem to mind the effect it would have on its client base when it began offering free e-post services. It’s a love-hate relationship, and Canada Post needs to embrace that. Getting into the internet game is the way to go if the company intends to evolve with its customers.
Peter Nowak says the same: “If a modernised Canada Post is going to be looking at new ways to make money, why not start with that old adage, where if you can’t beat ’em, join ’em? If it’s really the internet that is killing the postal service, why doesn’t the postal office get into providing internet service?” 
Nowak’s suggestion is lucrative and simple. He proposes that Canada Post should “offer both basic broadband and home phone service at rock-bottom rates [since] the point of postal services is to provide communications, not a particular medium,” noting that Canada Post “already resells long-distance phone cards through its own private label service.”  He likewise mentions how it could help solve the competition problem in Canada’s telecommunications industry, especially if Canada Post teams up with the Canadian Broadcasting Corporation, which could integrate a new role as a digital content provider.
If Canada Post were to offer internet access services, it could also greatly help reduce the percentage of households without internet access. This one could be a real game-changer.
Similarly, Canada Post could earn revenue from another industry that has affected its bottom line. While online banking is mostly responsible for the decline in statements, invoices, and cheques being sent through the mail, offering postal financial services to “the millions of Canadians without local bank branches or easy access to banking”  could make up the difference. The Canadian Centre for Policy Alternatives points out that “postal banking systems are proliferating around the world and are prominent in most developed countries. They have shown themselves capable of generating the additional income needed to preserve the postal system as traditional letter volumes decline.” 
And yet, Canada Post rejected the idea of postal banking, hiding behind the Conference Board’s erroneous report that Canada has a “highly developed financial service sector” as an excuse. All the while, the same report, in acknowledging the success of postal banking in countries such as Switzerland, neglects to mention that these countries also have highly developed financial service sectors. 
If so, it might be easy enough for Canada Post to begin offering a broader range of postal banking services. And if that’s the case, the company should redirect its current course and seriously consider building on what already exists in other areas of its operations as well.
For his part, Marc Zwelling of Vector Research believes that even though expanding postal financial services is a good idea, it’s not to be expected from Canada Post because “the Conservatives surely don’t want to antagonise the banks by giving them more competitors.” 
Zwelling suggests instead tapping into a new market where there is little competition by offering concierge services. Canada Post’s 60,000 experienced letter carriers and other employees “know the streets and neighbourhoods of the entire country. People trust them. Every carrier must have a driver’s licence and undergo a background check.”  The concierge service branch of Canada Post could, among other things, lease its staff to charities, unions, parties, and other causes to fundraise at the doorstep, distribute leaflets, and obtain signatures on petitions. Businesses could hire door-to-door salespeople. Another possibility would be to use Canada Post’s staff and vehicles to expand health services, especially in underserved areas. 
Zwelling also notes the obvious: Canada Post can pick up the mail in addition to delivering it.  As CCPA Director Trish Hennessy puts it, Canada Post is “reducing service down to the size of a postage stamp.”  But with all this service potential, that’s hardly necessary.
But why should they?
Canada Post and the mainstream media have misled Canadians into believing that those who receive home delivery are a minority in this country, which is completely false. In fact, 65 percent of Canadians currently receive home delivery in one form or another.  And those who don’t, should.
That’s right. Every Canadian should get mail delivered at home. Canadians agree: “Regardless of the biased Conference Board of Canada recommendations for home delivery termination, survey after survey has shown that the general public wants to retain door-to-door delivery, even expand it to those who do not have it.” 
And not just for letter mail — parcels, too. Not only would this help keep post offices uncluttered of parcels,  but maximum efficiency could be achieved by combining parcel and letter mail delivery. Canada Post has already started doing this as part of its Five-point Action Plan. The company has even thought of the many benefits it will achieve by doing this, including that employees would be protected from inclement weather.  This new measure will thus in turn help Canada Post avoid service interruptions like those which occurred during the holidays. 
Additionally, many cities and towns are already expressing opposition toward the construction of the new community mailboxes.  Their locations will be debated and contested. Existing regulations regarding intersections, fire hydrants, driveways, and doorways will have to be respected. Litter, especially of junk mail, could be an issue. The boxes will be targets for graffiti and vandalism. Sidewalks will have to be better maintained, or even created where they do not exist. Stop-and-go traffic will increase,  and parking access will have to be determined. Security of mail will be questioned. Personal safety concerns could arise, resulting in extra costs such as new street lights. 
Ottawa Councillor Peter Hume says, “I don’t think it’s going to be a welcome exercise for those communities that are affected. It’s not change. It’s big change.” 
Since Canadians really do want home delivery, some have argued that “about two or three times a week is the frequency that many critics of Canada Post’s new direction say would be sustainable for continued home delivery.”  But since mail has become increasingly important, that’s not seriously an option. Would you be willing to wait an extra two or three days for your paycheque or tax refund? What about your passport, if you filed in a rush? How would this affect when we send time-sensitive documents? Clearly, Canadians need the mail delivered regularly.
Even, Canada Post should expand delivery to Saturdays as well. It did so during the holidays, but Canada Post should broaden its vision beyond the jolly season. Ken Georgetti points out that “most other G7 countries continue to make home deliveries five or six days a week.”  The company could remain very competitive if its services were more consistent with consumer demand.
Robert Campbell, an international postal expert, says “there is tremendous public relations potential in this for Canada Post, to be the carrier of choice at a time of year when people are very, very conscious of delivery time.”  But online transactions take place year-round. After Christmas, there are Boxing Day sales and gift returns or exchanges. Then people begin to order the items they need for Spring Break vacation. Mother’s Day and Father’s Day gifts come next. Graduation dresses follow. Summer clothing. Back-to-school. Whatever the reason, people are ordering online year-round, not just during the holidays.
And if online shoppers choose to order online because they don’t want to leave the convenience of their homes, it’s likely this growing segment of Canada Post’s client base will choose the delivery method which is most convenient: that which delivers to the door, even on weekends, for a reasonable price.
Ironically, Canada Post’s CEO, Deepak Chopra, says “the end of door-to-door mail delivery will allow Canada to become a world leader in electronic commerce.”  How exactly, if online shoppers don’t find Canada Post to be the most convenient and affordable delivery option?
Admittedly, current parcel delivery is no better. If not at home to receive a delivery, it’s still necessary to travel to a post office or postal outlet to pick up the missed item. It’s been said that the new community mailboxes will avoid this hassle, as they will have a built-in parcel box. People will be able to pick up their mail and parcels at the same time, and they won’t have to go as far. Still, the proposed changes only benefit the people who are currently at a disadvantage — those who are not at home during delivery times. The situation is about to be reversed, and those who are home will have to leave.
Why not install parcel boxes at post offices, then? At least customers, when picking up items from missed deliveries, wouldn’t have to be there during business hours. Better yet, Canada Post could promote installation of the DoorBot (and perhaps partner with the company to pick up a commission for sales).
Canada Post’s idea of cancelling home delivery is not a real solution — and it was never meant to be.
Datalibre.ca, the blogging arm of Citizens for Open Access to Civic Information and Data, further reveals that Chopra “was also President and Chief Executive Officer of Pitney Bowes Canada and Latin America, [which] sells mailing software and mail metering services. They also have mail meters and scales, mail sorters, mail room printers, and of course, shipping services.” 
Pitney Bowes has “contracts with Canada Post,” says Datalibre.ca blogger Tracey. “It seems that if a company uses this service, it can get mail cost rebates, and it also seems that [Pitney Bowes is] running target mailing services and a parallel mail service to the post office.” This means that the company is “ahead of the curve when it comes to the rate hikes.” It even has client alerts “on how to modify the software attached to mail metering hardware.”  It’s an American company that “could reap a massive windfall from the gutting of Canada’s public postal service.” 
It seems that Chopra knew what he was after from the get-go — it’s no surprise, then, that the public consultations on postal restructuring were also manipulated. The Canadian Labour Congress criticises that “the consultations in Canadian communities were by invitation only” and that the flawed Conference Board of Canada report “was used as a basis for the public consultations.” 
Canada Post’s online public opinion survey was equally problematic. An analysis of comments posted to Canada Post’s website shows that “over half of the people who posted comments wanted either the status quo or improved services, and fewer than two in 10 called for cuts in services.” 
Furthermore, Green Party of Canada leader Elizabeth May wonders why Canada Post chose to move forward with such decisive actions when “a review of the Postal Service Charter is already ongoing, to be completed in fall of 2014.” 
The timing of the decision was not as shocking as the timing for its announcement, however. Ken Georgetti says that Canada Post “waited until the morning after the House of Commons had risen for its holiday break so that the government would not have to answer embarrassing questions, and they gave their unions no advance notice.” 
Even the Financial Post noticed that it was strange to fixate on declining mail volumes, “with the Christmas season in full gear and Canadians shipping cards and parcels more than they do at any other time of year.”  This was surely calculated to “contribute to low morale for postal workers.” 
So who to trust? Chopra and Canada Post’s manoeuvres do not align with those of a public service.
Recall that Canada Post, while mandated to be self-sustaining,  is not mandated to turn a profit. If it does, that profit is supposed to be distributed to public coffers. Canada Post is a public service meant to serve all Canadians. It is not a business only serving those who pay for it.
Yet situations like the following can arise. According to Canada Post, the majority of Canadians “buy stamps in booklets or coils,” while the “average Canadian household purchases fewer than two stamps per month.”  Since it looks like businesses purchase most stamps, it thus appears that once the new changes take effect, those who “will pay $0.85 per stamp, with discounts for customers that use the mail most,”  will mostly be businesses, whereas “the minority of consumers who purchase stamps one at a time will pay $1 per stamp.” 
Worse, though, is that businesses with Pitney Bowes’s metering service will continue to pay the old rates.  Moreover, “pricing has not changed for parcels and most of the marketing mail used by businesses and charities.”  The average Canadian continues to get the short end of the stick while the services which businesses use are left untouched.
And Chopra along with most of the other presidents and vice-presidents will continue to receive the same bloated salaries and undeserved bonuses and perks.  For they are truly undeserved if they think they can prioritise themselves above the 8,000 workers who will suffer lack of employment.  Or above the 60,000 workers whose pension plan they are attempting to “restructure.”  Even more so if they think they can prioritise themselves over every other Canadian citizen.
Ken Georgetti rightly notes, “When Canada Post locked out its workers in 2011, the Conservative government said the services they provided were so important that they had to be legislated back to work. Now Canada Post says those same workers are completely dispensable.” 
But according to the Canadian Union of Postal Workers, Canada Post “doesn’t have enough casual workers to draw on during times of stress.”  How can the company then presume to be able to function well with 8,000 fewer employees? If a business does not have enough employees to operate effectively, it will suffer no matter how little it spends on labour. This seems a far cry from the company’s claim that “a leaner workforce will create a more flexible and competitive Canada Post.” 
Nor does “adding to the general malaise still experienced in Canada’s labour market”  make sense for a Crown Corporation that only needs to break even. Does it make sense to return a profit to public coffers when these very same will be accessed to fund the social programs that support many of those whom Canada Post no longer employs?
The same applies to the pension fund. Canadians who have access to pension plans beyond their own savings, the Canada Pension Plan, and Old Age Security are increasingly lucky — and rare. Canadians will rely on these social programs more and more. Good jobs like those offered by Canada Post are needed more than ever.
Since Canada Post can’t implement its plans without some sort of investment, similar questions arise: “How much will it cost to purchase, install, and maintain community mailboxes for over 5,000,000 addresses? How about the thousands of vehicles they will need to purchase, insure, and maintain?” 
More importantly, cutting jobs costs the government revenue: “Eliminating 8,000 letter carrier jobs will cost the federal government as much as $50 million a year in personal income tax.”  Canada Post’s constant refrain in its official communications is to appear concerned about becoming a “burden on the taxpayer.” And yet, here it is creating a ready-made burden — one it is responsible for, but for which it won’t be accountable.
Why, then, should businesses like Pitney Bowes or any other be given yet more ways to save and profit while the costs are doubly passed on to the Canadian public? As Unifor National President Jerry Dias says, “There is no economic justification for these dramatic cutbacks; it’s just another dimension of needless austerity.” 
That Canada Post exaggerated its financial difficulties “to prepare the public for major cuts”  is not unexpected. It has been warning of impending doom for years, despite the fact that “many private sector for-profit companies would envy the performance of Canada Post over the past 17 years compared to the way they actually performed during tough economic times.”  That’s because those austerity measures have a purpose: the “exaggerated crisis in our postal service is part of an agenda being used to justify a reduction of public services and the slow privatisation of segments of it.” 
Even Chopra says that “privatising the postal service is not on the radar ‘for the next several years,'”  which is practically an admission that it eventually will be. In truth, the privatisation of the post office has already started. The closure of local post office branches in favour of opening franchise postal outlets in private businesses such as drugstores is a slow, piece-by-piece move towards privatisation, and it’s an integral part of Canada Post’s Five-point Action Plan, ostensibly to allow “busy Canadians to do more shopping in one place.”  Or in other words, to boost sales for those businesses.
Chopra has set the stage, and now Canada Post is faking its own death because it wants to commit suicide. As Trish Hennessy fears, Canada Post may soon be “part of Canada’s past.” 
- Send an online or print message to your MP
- Print a petition and collect signatures to send to the House of Commons
- Print and display a window sign
- Canada Post Wants to Eliminate My Job as a Letter Carrier. Here’s Why You Should Care (The Coast)
- CCD to Minister of Transport about Canada Post (Council of Canadians with Disabilities)
- We Can Beat the Right and Win the Fight at Canada Post (Socialist Project)
- Save Canada Post! (Fightback Magazine)
- Conservatives Destroy Postal Services, Drastically Raise Prices (NDP)
- Canadians Tell Lisa Raitt No More Postal Cuts (CUPW)