Canada Post not essential but not irrelevant

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While returning some items at Ikea, Conservative MP Lisa Raitt, the former federal labour minister, decided to weigh in through Twitter on the possible Canada Post lockout and, more existentially, the essential nature of the Crown corporation itself.

Raitt ruminated that if Canada Post “is not essential, why do we let it have a monopoly? Open it up.” If it is essential, she said, the government should draft an “appropriate law after an appropriate time.”

If by essential one means that 100 per cent of the population needs Canada Post for 100 per cent of communication projects, then, no, it’s not an essential service anymore, says Mount Allison University president Robert Campbell, who has studied post offices around the world.

‘All sorts of alternatives’

“There are all sorts of alternatives,” he said. ‘But I think for a non-trivial part of society, it still is a quasi-essential service in the sense they rely on it for their livelihoods or they rely on it for their piece of mind.”

In a digitized world, for the increasing number of people who rarely use the mail anymore, a lockout would likely be greeted with ambivalence, Campbell said.

“And that’s going to be terrible for Canada Post because the last thing in the world that you want is to have a large, increasing number of people saying you’re irrelevant.”

But there’s a significant portion of society that still relies on the service, he said. There are still a lot of people who like and, more importantly, trust physical, tangible communications, for example when they deal with legal documents or finances.

And the service continues to be important for people in rural areas or small areas, and for small and medium-sized  business, as well as for people who need the piece of mind provided by contact with the outside world — older and isolated people.

“[A lockout] will be hugely anxiety-making for them. And so it’s an odd situation where a non-trivial part of society will say ‘what’s the difference, who cares,’ and the others will say ‘this is the end of the world.’

For Canada’s first 150 years,  before television and radio,  the post office department was not only an essential form of communication but also essential for nation building, said Ian Lee, an assistant professor at Carleton University’s Sprott School of Business.

That was the only way for politicians to communicate with people across Canada, said Lee, whose study Is the Cheque Still in the Mail?, which looked into the future of Canada Post, was published last year by the Macdonald-Laurier Institute.

“It was the internet and radio and  TV and telegraph and telephone all rolled into one technology called the post office,” Lee said. “It was a hugely important institution.”

It later became a critically important institution as a very important partner in the payment system in Canada. But that was disrupted by the invention of the fax machine, followed by digitization  — the internet, e-commerce, online banking.

Disrupted by technology

“The post office, which once was unbelievably important in this country … has successively been disrupted by successive waves of technology,” he said.

Currently, 75 per cent of all the volumes in Canada Post is letter and junk mail, Lee said. But those volumes have been declining annually, he said.

Cheque writing has almost disappeared with digital payments. And, according to Service Canada, roughly 98 per cent of most government payments are now electronic deposits.

All this means that over the next 10 years, physical letter mail will continue to collapse, particularly as the older generation, which uses it most intensively, dies.

Yet Lee noted that the future is not bleak for Canada Post, as 25 per cent of its mail, parcel post, has been growing very rapidly because of the explosion of e-commerce. And that is where its future should lie.

He said Canada Post has been quitely transforming itself over the last five years and is doing very well. But he said it has less than 10 years to transform itself to a pure parcel post carrier.

“They do have a future but they’re going to have to reinvent themselves.”

How Canada Post reinvents itself, Campbell said, is a decision for the government, not the Crown corporation.

No one wants to put tax dollars into Canada Post, he said, but it’s still considered a public service, “so every time they do anything that offends our notion of what a public service should be doing, we get all uppity.”

“The government has to say to Canada Post: ‘This is what we believe universal service fo Canadians should be for the next 10 years.'”


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