Cory Morgan: Looming Strike Provides an Opportunity for Canada Post to Pursue Major Reforms

Commentary

Thirty years ago, the delivery of letters to homes was an essential service. Bills, cheques, and correspondence from loved ones all arrived by mail. Any interruptions in service could be devastating.

Because of the importance of mail delivery and the near-monopoly Canada Post held on it, the Canadian Union of Postal Workers became powerful. Postal workers enjoyed job security and generous compensation for relatively unskilled work. Now, though, things have changed, and a threatened strike by postal workers may backfire and provide the impetus to reform and scale down Canada Post.

Canada Post has lost $3 billion since 2018, and the losses are accelerating. In 2022, it lost $548 million. In 2023 it lost $748 million. The trend of losses can’t continue. As a Crown corporation, taxpayers will eventually be on the hook for the bill if losses keep mounting.

A mail workers’ strike would be an annoyance but it wouldn’t cripple the nation as it used to. Public support for striking workers would be tepid as the projected costs to taxpayers continue to rise for a service fewer are using.

Canada Post offered workers an 11.5 percent raise. The union has yet to respond to that offer. The union doesn’t have realistic leverage, and Canada Post should be warning of the layoffs to come rather than trying to buy its way out of a possible strike.

The current business model isn’t sustainable and it must change. In 2006, Canada Post delivered 5.5 billion letters. In 2023, they delivered 2.2 billion letters. While Canada’s population increased by over 8 million people in that period, letter mail delivery is less than half of what it had been. The trend of reduced letter mail will only continue. Electronic communications have wiped out the need for most letter deliveries, whether personal or business related. This trend began with the advent of the fax machine and it’s ending with phones capable of sending communications and documents within seconds at little to no cost to the user.

Mail delivery is a labour-intensive process. If Canada Post is ever to see its numbers get back into the black, it must reduce labour costs dramatically.

Canada Post must scale back aspects of its service, and the areas requiring cuts are obvious. The average household receives two letters per week, despite mail delivery service being offered five days per week. Postal delivery service for homes should be reduced to one or two days per week. The demand doesn’t justify dedicating a postal carrier to a neighbourhood five days a week. That shift alone offers large savings. A single postal carrier could cover a much wider area if they only had to cover each route once or twice a week.

Canada Post must also end all door-to-door mail delivery services. It had begun the process of ending home letter delivery, but an election promise made by Justin Trudeau in 2016 halted the process. Today, one-third of Canadians still get mail delivered directly to their households, and they don’t need that service. Centralized mail pickup spots, whether in postal outlets or superboxes, have proven more efficient than traditional home letter delivery. One worker with a truck delivering to superboxes can cover ground that dozens of door-to-door carriers do.

The bulk of mail that people receive now is in the form of admail rather than personal communications. In embracing flyer delivery services for businesses, Canada Post brought in a new revenue stream to help cover delivery services, but physical admail use is in decline. Companies have found digital marketing methods to be more effective both in cost and impact. Flyers tend to be dumped into recycle bins without being read, while people view them as environmentally damaging and wasteful.

Package delivery to homes has been increasing, but Canada Post hasn’t been able to effectively capitalize on that market, and private operators now dominate it. It’s hard to envision a Crown corporation being able to effectively compete with Amazon or FedEx.

Canada Post is still an essential service, but it must be focused where there is a need.

Canada is a vast country with many people living in isolated regions. Postal service is essential to people living in remote communities and if only private courier companies served them, the costs would be exorbitant. Those are the sorts of voids in service a national postal carrier should be filling.

Yes, there will be heavy job losses as Canada Post shrinks its scope. The cuts are inevitable, though, and will be less painful if they are carefully planned for rather than made when the corporation hits the economic wall.

Instead of raises for workers, Canada Post should be examining buyout packages. Instead of trying to pacify the union, the corporation should be asking it to help with the cutbacks to reduce the pain of workers losing their jobs.

In threatening to strike, the Canadian Union of Postal Workers has inadvertently cracked the door for Canada Post to pursue reforms. Now, the corporation must open the door fully and get on with it.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.

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