Winnipeg Free Press - PRINT EDITION
Posted: 12/12/2013 1:00 AM | Comments: 0
Canada Post delivered a plan Wednesday for streamlining operations and cutting losses -- late and long overdue, critics say -- but it may only be a first step on a route that could ultimately require even more fundamental reforms.
The digital revolution has made the post office nearly irrelevant for millions of ordinary Canadians and businesses, who today rely less on conventional mail and more on electronic transactions and solutions.
People are more likely to communicate by email, voice mail, phone, text or some other device than by the old-fashioned letter, which is quickly becoming an anachronism.
The plan to phase out home delivery over five years will be the most controversial measure in the Crown corporation's plan, even though it will only affect about one-third of Canadians. The rest of Canada has been using community mailboxes, which requires a trip around the corner or up a country road.
There's no question group mail boxes are less convenient, particularly for the elderly and the disabled. But it will be fairer and more equitable because it will demand the same effort and sacrifice from every Canadian.
Senior citizens and the bedridden who rely on community mail boxes have found ways to retrieve their mail, and those affected by the phase out of home delivery will do the same.
Canada Post's charter requires it to be financially self-sustaining, but a report by the Conference Board of Canada said it is facing losses of $1 billion by 2020. That doesn't include payments of $1 billion required to meet pension requirements in 2014, although the government has agreed to provide temporary relief while the corporation gets its affairs in order.
The post office believes it will be out of the red by 2019 as a result of initiatives that will generate savings of up to $900 million a year.
The company plans to eliminate about 8,000 jobs that will no longer be needed when home delivery is cut, while wages are to be reduced through collective bargaining, which sounds more hopeful than realistic, unless the government passes legislation.
Canada Post's rising debt is a burden Canadians should not have to shoulder, particularly when options to cut costs and boost service are available.
If traditional forms of mail are declining, e-commerce has caused a rapid increase in parcel delivery, a service that Canada Post must improve if it wants to compete. Delivery by drones may still be a fantasy, but the post office cannot afford to be left behind in this lucrative field.
Canada Post once delivered mail twice a day six times a week, but today it's questionable if delivery five days a week is still necessary. The conference board, for example, said traditional mail is expected to decline another 26 per cent during the next six years.
Delivery on alternate days could reduce costs by 44 per cent, the board said. If Canadians aren't ready for that, however, the post office could easily reduce residential service to four days a week without causing much disruption.
The post office isn't considering reducing delivery, but as volumes continue to slide, it may have no choice.
Every member of the European Union has privatized its postal service or allowed competition. The result is better service and new ventures, such as banking.
Such changes are not being contemplated by the government or the post office yet, but Canadians should keep an open mind, particularly if it protects their pocketbooks and improves service.
There has been a postal service in Canada since the 17th century, but it has evolved over the centuries to meet contemporary needs.
Canada Post may have embraced e-commerce and other electronic solutions, but it has continued to operate on an old business model that is needlessly expensive and sluggish in responding to the needs of Canadians.
Republished from the Winnipeg Free Press print edition December 12, 2013 A16
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