Thunder Bay MP Rafferty Questions Canada Post Cuts

Canada Post is changing business model to adapt to digital age
Canada Post says it is changing business model to adapt to digital age
John Rafferty MP
John Rafferty MP Thunder Bay Rainy River

THUNDER BAY = Federal Politics – In last week’s column I tried to look into the crystal ball for the year ahead. This week it’s back to the present, or recent past I should say, to look at the end of Canada Post as we know it.

Canada Post home delivery survived two Great Wars, more than a dozen recessions and The Great Depression, and the austerity of the Mulroney years, but just eight years under Stephen Harper’s administration has finally brought this proud institution it to its knees. Just one day after parliament rose for the winter session Canada Post announced that for the first time in its history it won’t be delivering to mail to homes in Canada in the near future. The timing of the announcement, just a day after parliament rose for the winter, allowed the Conservatives to enjoy a winter break free from difficult questions from the Tom Mulcair and the NDP Official Opposition on the issue. A pleasant coincidence eh? Right.

The arguments in favour of ending home delivery are, on their face, bogus. I have heard the following three reasons offered by the government and some constituents on the cuts; a) mail volumes are plummeting, b) the internet has rendered mail useless, and c) Canada Post loses money and I don’t want to pay for it. These arguments are exaggerated at best and flat out false at worst. Let me explain.

Is mail volume really plummeting as some would have us believe? Let’s look at the numbers provided by Canada Post in their annual reports. In 2006, Canada Post processed 11.6 billion pieces of mail. In 2012 the Crown Corporation processed 9.6 billion pieces. Two billion pieces is an astonishing drop you say? It’s about 11.1% over a six year period. Not fast and not dramatic. More like a steady drip than a flood some would say. There should be lots of time to adjust and remain profitable – and Canada Post (see below).

Is the internet making Canada Post and home mail delivery redundant? This is a common one, and the answer again is ‘no.’ There is no universal agreement as to when the internet was founded, but for consumer purposes it wasn’t really useful until the mid-1990’s. In March 2001 Canada Post delivered 9.8 billion pieces of mail – about the same number as in 2012. So who still uses Canada Post for home delivery – older people who are not as tech savvy as the younger crowd, but also small and large businesses who rely on online sales. You see, when you buy something online and pay the bill via online banking the supplier must still deliver your book, sweater, or computer to you and Canada Post offers the most competitive shipping rates.

So that’s all well and fine, but Canada Post still loses money and costs taxpayers billions right? Well, let’s look at the facts. Here is Canada Post’s profit by year from 2002 to 2012; $71 million (2002), $253 million (2003), $147 million (2004), $199 million (2005), $119 million (2006), $54 million (2007), $139 million (2008), $357 million (2009), $142 million (2010), loss of $226 million (2011), and back to profit in 2012 with $131 million taken in. Doing the math, Canada Post has not only NOT cost taxpayers money in 9 out of the last 10 years, but actually passed on $1 BILLION IN PROFITS to taxpayers over that time – and all while providing timely and high quality service to our doorsteps and mailboxes.

So what is the problem at the Canada Post really? I would say leadership. While cutting home delivery service and 5000 well-paying jobs the President and CEO, Deepak Chopra, saw fit to give himself a 33% bonus last year on top of his $518,600 salary. If Canada Post is really struggling and in crisis what’s with the bonus for the CEO? And don’t even get me started on the 22 Vice-Presidents (yes, 22), none of whom will be among the 5000 job cuts.

With near record mail volume (just over 10% off the record) last year, the need for face-to-face delivery even in the digital age and with more than $1 billion in profits over the last 10 years is there really a crisis at Canada Post? Do we really need to scrap home delivery? Should Canada Post CEO keep his job and his big bonus while cutting those of 5000 others? The evidence shows, and my strong opinion is, that the answer to all of the above questions is a loud and resounding ‘NO.’

John Rafferty MP
Thunder Bay Rainy River

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John Rafferty is the current Member of Parliament for Thunder Bay – Rainy River and a member of the New Democratic Party caucus in the House of Commons in Ottawa, Ontario. John was first elected to serve as MP in the 2008 federal election and was subsequently re-elected on May 2, 2011 with 48.1% of the vote.