Canada Post should consider resuming the phaseout of home delivery, but will still need a radical overhaul to stay financially viable, a federal task force report says.
Options offered to the federal government in a 94-page discussion paper released on Monday include charging for home delivery, reducing the number of delivery days and hiking the price of stamps.
“The financial challenges are large and growing at an accelerated rate,” concluded the four-member task force headed by Montreal businesswoman Françoise Bertrand. “Although … options have been presented, they alone are insufficient to bridge Canada Post to a financially sustainable future. Other fundamental and transformational changes must be brought to bear.”
Canada Post suspended plans to end home delivery for about five million Canadian households and replace it with community mailboxes just days after the Liberal government came to power last October.
The post office’s main challenge is that the Internet and new forms of communication are steadily eroding its core business – delivering letters – while residential areas expand. Every year, it delivers fewer items to more addresses.
The report is part of a review of the post office launched by the Liberal government, which has promised to announce changes by mid-2017. A House of Commons committee is set to begin hearings across Canada in the next few weeks and issue a report in December.
“Canada Post services are important to Canadians and countless businesses that provide valuable middle-class jobs,” Public Works and Procurement Minister Judy Foote said. “This is why our government is providing the public with the opportunity to shape the Canada Post of tomorrow.”
The task force said the post office could generate $762-million a year in savings or revenue gains from measures that include resuming the phaseout of delivery, selling 800 of its busiest postal retail outlets to the private sector, delivering mail every other weekday, and closing more processing plants.
Canada Post, which is required under its charter to be financially self-sustaining, has lost money in three of the past five years. The task force said massive pension obligations and high fixed costs mean it will not be able to stay in the black over the medium to long term.
Ending home delivery accounts for more than half the total projected savings or revenue gains, or $400-million a year. About five million of 15 million Canadian homes still get mail at their door.
Reinstating home delivery for all Canadians would cost $1.2-billion a year. The task force said that, to do that, the post office would have to charge as much as $124 a year per home or raise stamp prices by another 50 cents on top of the increases it already needs to make.
The task force also rejected the idea of the post office getting into the banking business – an option the Canadian Union of Postal Workers is pushing hard. The members said Canadians are well served by banks and credit unions, and the post office would have a tough time competing.
“It’s disappointing, for sure,” CUPW president Mike Palecek said. “It doesn’t take seriously the possibility of postal banking.”
He also warned that many of the other options would require reworking collective agreements with thousands of union members. “That’s not going be done easily,” Mr. Palecek said.
In a statement, Canada Post praised the task force for endorsing “the path the corporation was taking to secure its future for Canadians.”
In spite of the controversy over phasing out door-to-door delivery, the task force report includes polling data suggesting a majority of Canadians (67 per cent) actually supports the idea of shifting everyone to community mail boxes. But more than 90 per cent said service should be maintained for the elderly and those with mobility problems.
OTTAWA — The Globe and Mail
Published Monday, Sep. 12, 2016 7:05PM EDT
Last updated Monday, Sep. 12, 2016 7:07PM EDT