Palliatives won’t save struggling post office

Posted on in Governance Debates – Opinion/Commentary – Tom Muclair and Justin Trudeau are pandering to urban voters with an unsustainable pledge to preserve home mail delivery.
Jul 30 2015.   By: Carol Goar, Star Columnist

Tom Mulcair and Justin Trudeau will pick up a few urban votes with their pledge to save what is left of door-to-door mail delivery. They will burnish their reputations as defenders of Canada’s public services. They will reinforce their images as fix-it men, set to reverse the damage Prime Minister Stephen Harper has done to national institutions.

But neither of the opposition leaders is offering a sustainable solution to Canada Post’s woes. Letter mail is rooted in the pre-digital era. What the post office needs is a clear mandate to re-think its role and re-invent its business model.

Harper has failed to provide that. He let the 34-year-old Crown corporation stumble. Lacking direction, it closed postal outlets, raised the price of stamps, laid off workers, redistributed delivery routes and downgraded 1 million home-delivery customers to community mailboxes.

Mulcair and Trudeau are promising to preserve the remains of a partly dismantled Crown corporation. But that isn’t a viable plan, it is a temporary palliative.

It is true, as the NDP contends, that Canada Post eked out a modest profit last year. But that was the result of aggressive cost-cutting. Further downsizing won’t generate the kind of revenue needed to reinstate home delivery for those who have lost it and guarantee its continuation for those who haven’t.

The Liberals intend to halt the phase-out of home delivery and launch a top-to-bottom review of Canada Post. Their hope is that the probe will reveal a way to provide high quality service at a reasonable cost. At minimum, it will buy them time to come up with Plan B.

What neither opposition party has disclosed is how much it is willing to spend to maintain home mail delivery and where the additional revenue will come from.  In the short term, Canadians who still have door-to-door delivery (about 26 per cent) would get relief from a NDP or Liberal government. In the longer term, they would be saddled with an expensive, inequitable white elephant.

Their mailboxes would be stuffed with even more flyers, brochures and solicitations. Deepak Chopra, who heads the Crown corporation, touts the daily onslaught of advertising as a profitable business line. “We are very excited about the creativity of the marketing community.”

Letter rates would keep rising. Since 2010, the cost of a domestic stamp has gone up by 49 per cent (five times the rate of inflation). Another 5.8-per-cent increase is slated for next year. On top of that, banks, utilities and phone companies charge a $2-fee to customers who pay their bills by mail.

What’s needed is not a quick fix; it is rational plan to reconcile what Canadians want with what Canada Post does.

– Maybe that means ending the Crown corporation’s monopoly on basic mail. Private entrepreneurs might be able to provide more efficient service than Canada Post to those who choose home delivery.
– Maybe it means reducing the frequency of mail delivery. It would at least be worth asking Canadians whether they’d be satisfied with receiving mail three times a week.
– Maybe it means asking what belongs in a mailbox. If consumers don’t want junk mail and Canada Post is actively promoting it, there is a problem.
– Maybe it means creating a small team within the corporation to provide personalized delivery to Canadians who can’t safely get to a group mailbox, while the organization as a whole develops new ways of connecting Canadians to each other.
– Maybe it means privatizing the post office as most European countries have done. That would bring in managers more attuned to consumer demand and less constrained by the priorities of the past.

The least tenable option is staying on the current trajectory. The Tories knew that when they took power, but provided no leadership. The New Democrats and Liberals know it, but seek to push the problem down the road.

That is fine if they acknowledge that prolonging home delivery is an expensive stopgap. It is misleading if they peddle it as a lasting solution.

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