Canada Post is 'effectively bankrupt,' should phase out door-to-door letter mail delivery: report
Canada Post needs to phase out its daily door-to-door letter-mail delivery service for individual addresses and also make other changes to reverse its growing financial losses, according to a new report released on Friday.
“It cannot continue to require impossible-to-meet delivery standards,” said the report by the Industrial Inquiry Commission (IIC) that was created to review the key issues in the collective bargaining dispute between Canada Post and its workers . The commission is led by William Kaplan, an arbitration and mediation expert.
The report said that Canada Post is facing an “existential crisis” and that it is “ effectively insolvent or bankrupt .” Without immediate interventions, its fiscal situation will “continue to deteriorate,” it said.
Among the other changes, the report said that Canada Post needs to be able to hire part-time employees to deliver parcels on the weekend and assist with volumes during the week.
“These employees should be paid the same rates and be subject to the same terms and conditions as regular employees,” it said.
It also said that the moratoriums on rural post office closures and community mailbox conversions should be lifted. This is a policy that was adopted by the federal government in 1994. It prevents Canada Post from closing or franchising nearly 3,600 post offices that were identified as being in rural areas in 1994.
Such a step could make Canada Post’s operations more efficient and save money, the report said.
“The Government of Canada can decide to subsidize Canada Post’s growing deficits indefinitely. Or necessary changes can be made to modernize the way Canada Post goes about its business,” the report said. “The moratoriums no longer make sense … when letter mail is down, and will likely soon disappear, and when the future of Canada Post is hanging in the balance.”
The report also stated a number of reasons behind Canada Post’s downfall. They include the rise of parcel delivery competitors, certain work rules that restrict efficiency, such as not being able to assign existing employees with additional work once they have finished their assigned tasks.
It also said that the organization’s situation worsened after the recent national strike since a number of long-standing customers reportedly moved their business elsewhere.
These changes are just the “first steps,” the report said. In the long run, Canada Post needs to catch up with its competitors. “Seven-day-a-week parcel delivery must be followed by continual technological innovation just to keep what part of the parcel market Canada Post currently retains, much less to grow the business,” it said.
Doug Ettinger, Canada Post’s chief executive, lauded the report and said in a statement that it provided Canadians with a “ straightforward assessment of the challenges” that the organization faces.
“We welcome the report’s recommendations,” Ettinger said. “We would also like to thank William Kaplan for his expertise in cutting through the issues to provide a report that lays the foundation for establishing a modern postal service built to serve the evolving needs of the country.”
The union representing Canada Post’s workers wasn’t immediately available for a comment on Friday. However, on Thursday, it said in a statement that it had received the report prior to the public release and was reviewing it.
• Email: nkarim@postmedia.com
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