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Labour + Industry

Polled Public Opposes Privatized Canada Post

Fearful that cuts spell an imminent sell-off, workers call to reinstate 'postal banking.'

Tom Sandborn 1 May

Tom Sandborn covers labour and health policy beats for The Tyee. He welcomes your feedback and story tips at [email protected].

Amid fears that job cuts and service changes spell imminent privatization of Canada Post, the postal workers' union is renewing calls for the Crown corporation to consider revenue-generating alternatives.

Two-thirds of Canadians "have no appetite" for the privatization of their postal office, according to a poll commissioned and released yesterday by the union.

"Canadians have consistently rejected privatization as an option for our post office," said Denis Lemelin, national president of the Canadian Union of Postal Workers, in a news release. "This opposition has kept privatization-friendly governments at bay for many years, although it may not stop the Harper government."

In December, Canada Post CEO Deepak Chopra announced a major, long-term, five-point plan to overhaul Canada Post in an effort to save what he depicted as a struggling organization. When the changes were announced, Canada Post repeatedly highlighted a Conference Board of Canada report that documented challenges facing the postal service and provided cost-trimming options.

Changes include the end of door-to-door letter delivery and the postal workforce shedding between 6,000 and 8,000 workers over the next five years, mainly through attrition, as well as opening more post office branches in small retail stores.

"Cutting door-to-door delivery would make [Canada Post] more attractive to a private sector investor," said Lemelin in the news release. "It could also undermine public support for our postal service."

Instead of reducing service and cutting workers, the union renewed calls at a recent meeting in Ottawa for the post office to diversify its offerings, and learn from the many countries across the globe where post offices do more than manage mail and package delivery.

In countries like France, New Zealand and the U.K., postal offices serve as widely-distributed sites where citizens can access banking services, an approach that experts say generates cash flow for the post office, improved banking service to "under-banked" communities, and provide much-needed competition for commercial banks.

In Canada, over 1,700 bank branches and hundreds of credit union branches have closed over the last two decades, and of the 615 First Nations reserves across the country, only 54 are served by a local bank or credit union. An estimated three to eight per cent of adult Canadians have no personal bank account.

For its part, Canada Post isn't currently interested in postal banking, according to spokesman Eugene Knapik. In recent years, the post office has carefully considered many opportunities to grow revenue, Knapik wrote via email. Options included finding new business lines that were outside of its core competencies and expertise.

"Banking was one of the potential revenue streams that we carefully considered," he wrote. "But it became clearly evident that the challenges to make postal banking viable in Canada were insurmountable. Banking and financial services are very complex and sophisticated. It would be unrealistic to believe that a transportation and logistics company like Canada Post could replicate the conditions required to be viable in this sector."

Canada Post did finances for 100 years: researcher

This isn't the first time that the postal banking option has been explored. As reported earlier in The Tyee, CUPW president Lemelin floated the idea in testimony to a Parliamentary committee soon after Chopra announced his proposals for postal change.

"Today we have thousands of communities with a post office, but no bank; we have hundreds of thousands of citizens without bank accounts," Lemelin told the Standing Committee on Transport, Infrastructure and Communities on Dec. 18. "Why is it that the management of all of these other postal administrations has the imagination to expand their financial services and ours does not? We need innovation, not excuses for failure."

Researcher John Anderson published a Oct. 2013 paper arguing in favour of Canada returning to its earlier policy of delivering some financial services through the post office. Canada had postal banking for 100 years after it was created in one of the country's first laws in 1868, Anderson pointed out. The service stopped in 1968.

Anderson suggested that a return to postal banking would not only invigorate Canada Post's cash flow and address concerns about the sustainability of a post office in the digital age, but would also create more accessible banking opportunities for underserved communities and individuals at a modest cost, given the post office's existing infrastructure across the country.

He said that a Canadian postal banking system might serve non-governmental bodies, as the French system does, or provide targeted services to First Nations communities and individuals, as New Zealand's system does.

582px version of Poll about Canada Post privatization
CUPW's poll results, released yesterday, are drawn from a Stratcom national online survey which interviewed a sample of 1,512 randomly selected Canadians between April 9 and 10, 2014.

Business writer and critic Linda McQuaig finds the postal banking proposal "very exciting." In an interview, McQuaig emphasized that Canada Post has almost 6,400 outlets in Canada, so the reach of the proposed banking system would be nationwide and would bring banking into small and rural settings where big banks are loathe to set up shop.

"Earlier CEOs at Canada Post were more positive than Deepak Chopra," McQuaig said. "The right in this country keeps insisting we need to cut back on public services and make us into nothing but consumers. This postal banking proposal is a massive win-win for everyone. It would see Canada Post diversify and grow stronger instead of cutting-back services and employees."

Despite being invited, Canada Post did not send representatives to the postal banking symposium, CUPW president Lemelin said. But the union will keep up the pressure. "We are going to keep pushing for this."

CUPW begins negotiations on a new contract with Canada Post in early 2015, and Lemelin predicted that postal banking would be a topic put on the table by negotiators.

He said the federal New Democratic Party has already endorsed the CUPW idea, and that his union was in discussions with the Liberals and the Parti Québécois to try and win their support. Observers from the Bloc Québécois were present at the Ottawa symposium, he said, and expressed interest, although the Bloc has not yet taken a formal position.  [Tyee]

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