Canada Post: A Billion-Dollar Boondoggle?
One of the most frequently repeated claims in coverage of yesterdayâ€™s Canada Post announcement is that the Crown corporation is on track to lose a billion dollars annually by the decadeâ€™s end. This apprehended threat to taxpayers supposedly justifies the complete elimination of door-to-door mail delivery.
The Conference Board made this billion-dollar projection earlier this year in a report commissioned by Canada Post management. But as the Canadian Union of Postal Workers pointed out at the time and as I noted on last nightâ€™s Power & Politics (video below), the Conference Board got to a billion dollars in 2020 by starting from an assumed loss of $250 million in 2012. In fact, Canada Post turned a modest profit in 2012.
Declining letter volumes do pose a major challenge to Canada Post. An alternative to service cuts would be to provide new services through the Crown corporationâ€™s existing network of post offices, such as postal banking. We should consider these options rather than being bowled over by the Conference Boardâ€™s large but dubious round number.