In theory, Crown corporations are supposed to enjoy a wide degree of independence. In practice, when they do something really dramatic, the government of the day is alerted and signs off on the proposal.
So although Canada Post, a Crown corporation, unveiled its new plan this week – one destined in all likelihood to fail – the Harper government would have known all about it.
Predictably, therefore, the government wanted to flee as fast and as far as possible for what it had approved, knowing the political flak to come. That kind of sneaky politics, so predictable in Ottawa these days, explains why the Crown corporation’s plan was unveiled after Parliament adjourned (hence no pesky questions) and why the appropriate ministers refused all media requests for comment.
The plan is a curious one. It asks users of first-class mail to pay much more for a stamp, then promises to make it harder to use the service by denying urban dwellers home delivery. Imagine that in another business: Pay a lot more but get poorer service. This is supposed to work?
The world of communications is radically changing, as can be attested by newspapers and magazines, book publishers, retailers of all kinds (a shout out to Ottawa’s Shopify for its astounding success), businesses large and small. As a personal test, ask yourself how many e-mailed Christmas messages you received this year compared to, say, five years ago. Now think about five years from now, when the cost of sending cards will be $1 within Canada instead of the current 63 cents.
A dollar for a first-class letter is a recipe for driving people away from first-class mail. The drift away from letters, which has been occurring for years, will now turn into a permanent, massive loss, because price points often drive behaviour. People and business will send fewer and fewer letters, period. Which will mean fewer and fewer employees delivering them. Hence the anticipated job losses of around 8,000 people.
In addition, it’s hard to see retailers in the online world flocking to Canada Post when customers won’t be getting home delivery in urban areas for what they’ve ordered. Asking Canada Post to compete with private parcel deliverers who come to your door is to ask the corporation to compete with one hand tied behind its back. As a retailer, under these circumstances, would you use Canada Post?
So this model of returning Canada Post to profitability seems destined to be a very long shot, especially with the massive pension overhang that afflicts so many public institutions. A four-year period of grace given by the Harper government presumes that Canada Post will be running surpluses by then, which, on the evidence, is unlikely to happen with much higher prices and less service.
The politics of Canada Post’s decision will be fascinating and difficult for the government, which is why, having approved the corporation’s plan, it ran to avoid commenting on it, let alone trying to explain, justify or sell it.
Canada Post is increasingly irrelevant for a lot of people, because they are online for just about all their communication needs. But nothing gets people more riled up than having something they are accustomed to taken from them. They can also get very irritated at paying much more to maintain a service they already receive.
It’s the kind of issue people can understand, unlike many other wonky policy issues. It’s also an issue that hits the Conservative core, which wants to square circles with fewer taxes, lower costs, more choice and better service.
The Conservatives can argue, and are already doing so, that Canada Post’s losses are bad and government shouldn’t subsidize them. But, alas, it is the conservative nostrum today, expounded by their advocates in the news media and various levels of government (see Toronto’s Rob Ford) that all problems can be solved by better efficiencies, rather than by choosing higher taxes, more fees or fewer services.
In fairness to the Conservatives, watch the New Democrats and Liberals on this one. They will criticize the indignities heaped upon the disabled and the elderly, and the NDP will talk about the loss of union jobs. But there will be silence on the topic of serious alternatives.Report Typo/Error
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