Skip to main content
opinion

Canadians don't get hopping mad about a whole lot. But the end of home mail delivery in small cities and leafy suburban enclaves across the country has seen ordinary citizens, and a few grandstanding politicians, go to extraordinary lengths to vent their anger at Canada Post.

By 2019, five million additional Canadian households will no longer have their mail delivered to their doorstep and instead will have to pick it up at a nearby "community mailbox." Not only are many rebelling against the loss of what they see as an essential service; the installation of the unsightly metal mammoths in pristine neighbourhoods has led to sit-ins, lawsuits and obstructionism, not to mention vigilante action by one big-city mayor (Montreal's Denis Coderre) armed with a jackhammer.

Thomas Mulcair is promising to return these neighbourhoods to their quiet bliss. If he becomes prime minister, the New Democratic Party Leader would order Canada Post to restore home delivery to areas that have already been switched over to community mailboxes and halt future service cuts by the Crown corporation.

Liberal Leader Justin Trudeau is vowing to stop the changeover to community mailboxes and conduct a review of Canada Post. "We strongly disagree with the Conservative decision to ask Canadians to pay more for a reduced quality of service," the Liberals say on their website.

What the Liberal promise would mean in practice is unclear. But if it means freezing the price of stamps (as former Liberal prime minister Jean Chrétien's government did in 1997) or preventing the price from rising by more than two-thirds the rate of inflation (as Mr. Chrétien did in 2000), it would spell further trouble for the Crown corporation's financial sustainability. Those moves starved Canada Post's coffers just as its lettermail business began to bear the full impact of the Internet.

Under Canada Post's current business plan, approved by Stephen Harper's Conservative government, the price of regular stamps purchased in booklets or coils was raised to 85 cents each from 63 cents in 2014. It's set to rise to 90 cents on Jan. 1. Canada Post has also introduced a tiered pricing system that provides bulk discounts to businesses and advertisers, in order to slow the decline in mail volume.

But those are stopgap measures that cannot reverse an ineluctable trend. The number of Canadian households is growing while mail volumes are plummeting. In the first quarter of 2015, Canada Post delivered 8.4 per cent fewer letters and bills than in the same quarter in 2014. Carleton University business professor Ian Lee predicts that half of Canada Post's current business will disappear by 2025. Increased parcel deliveries can only partially offset the loss.

Even with the recent increase, stamp prices do not come close to covering the true cost of delivering the mail. Indeed, as fixed labour and capital costs are spread over declining mail volumes, the per-unit cost of delivering a letter is rising at an unsustainable rate. Hence, CEO Deepak Chopra's bold plan to save Canada Post.

The Crown corporation estimated that door-to-door delivery cost $289 per household in 2014 – 2.6 times more than the cost of that delivery to a community mailbox. More than four million households in newer subdivisions already get their mail at community mailboxes. Millions more pick it up at a local post office or in a building lobby.

Only one-third of households still receive home delivery. But they're not giving it up without a fight. So far, Mr. Harper is standing behind Mr. Chopra. Last month, his government renewed the CEO's contract for another five years at a salary of $500,000.

But Prof. Lee thinks the government needs to go much further to unshackle Canada Post, which is facing a massive $6.8-billion unfunded pension liability that risks landing on taxpayers' laps unless the Crown corporation dramatically overhauls the way it operates. In a recent study for the Macdonald-Laurier Institute, Prof. Lee recommends lifting the 21-year-old moratorium on closing rural post offices, reducing residential mail delivery to three days a week and franchising remaining corporate-owned postal outlets. Franchises cost Canada Post two-thirds less to operate.

Mr. Mulcair cites Canada Post's renewed profitability – it earned before-tax profits of $269-million in 2014 – to argue that there is "no real reason to remove [home delivery] in the first place." But this ignores the writing on the wall: Mail volumes will continue to slide and a quarter of Canada Post's 65,000 employees are set to retire by 2020. Pension costs alone could kill it.

Populist politicians wielding jackhammers or free-lunch promises can't change that.