Time to re-think Canada Post?

Canada Post.

Well now, IÔÇÖve got your attention havenÔÇÖt I?

IÔÇÖve learned that Canada Post is the favourite topic of most community newspaper publishers and IÔÇÖve spent an inordinate amount of time learning why. Essentially, Canada Post is both a key supplier and a key competitor to our sector. How well it functions as a supplier and how fairly it functions as a competitor have been the topics of many previous columns.

What IÔÇÖve been curious about recently is how other sectors currently react to Canada Post. ItÔÇÖs been more than five years since the publication of the Canada Post Mandate Review by George Radwanski. At the time, many sectors contributed their concerns about the workings of the government-owned monopoly. Radwanski himself noted that many presenters described Canada Post as a vicious and aggressive competitor.

Have those views changed, I wondered? Not much, it seems.
Current concerns point to the fact that Canada Post is an unregulated monopoly (apparently the only unregulated postal service in the Western world). The post office is expanding into a variety of non-traditional services, presumably to compensate for declining First Class Postage use. This leads to fears about more unfair competition and the possibility of cross-subsidization across business units. Cross-subsidization was a key issue during the mandate review.

Canada Post is arguably the least transparent of all the government-owned corporations. It has a large management team and a small board of directors. The office of the Ombudsman, one of the few outcomes of the mandate review, is specifically restricted from dealing with matters of corporate policy such as classifications and pricing, doesnÔÇÖt deal with CPC subsidiaries and none of its rulings are binding on the corporation. Canada Post is not subject to access to information legislation.

Service is generally not a major issue with other sectors; neither is pricing. The people IÔÇÖve spoken to concede that delivery standards and general business operations have improved.

There are private sector firms that maintain Canada Post pricing is too high, by as much as 35 per cent, especially in the areas of Addressed and Unaddressed Admail. Canada Post jealously guards addressed Admail, used extensively by direct marketers and charities, under the provisions of its legislated monopoly. Private carriers disagree with this but none have tested it legally. Yet.

The most famously disgruntled competitor is United Parcel Service (UPS) which, as everyone knows, has launched a suit against the federal government under Chapter 11 provisions of the North American Free Trade Agreement (NAFTA). At the heart of its 100-page Statement of Claim (as yet not released, still awaiting the governmentÔÇÖs Statement of Defence) is the charge that while NAFTA allows state-owned monopolies, it doesnÔÇÖt allow unregulated monopolies. UPS has reportedly presented evidence of a variety of special considerations Canada Post receives within government which lead to unfair competition.

The NAFTA suit is a last-ditch strategy available only to foreign competitors. As a result, it has drawn fire from groups opposed to NAFTA, especially the Chapter 11 provisions that allow foreign corporations to sue governments when their economic interests are restricted due to unfairly applied regulations. Interestingly, UPS launched a similar suit against the German post office in the early 90s and just recently won that case, forcing Germany to put its state-owned postal service on a more level playing field with its competitors.

If it was ever possible to once again knit together a coalition of industry sectors concerned about Canada Post, as was done during the mandate review, the issue to be resolved would boil down to this. What do you ask for: the re-regulation of Canada Post, or the complete stripping of its monopoly status? Which would serve Canadian