Canada Post: A Billion-Dollar Boondoggle?

December 12, 2013

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One of the most frequently repeated claims in coverage of yesterday’s Canada Post announcement is that the Crown corporation is on track to lose a billion dollars annually by the decade’s end. This apprehended threat to taxpayers supposedly justifies the complete elimination of door-to-door mail delivery.

The Conference Board made this billion-dollar projection earlier this year in a report commissioned by Canada Post management. But as the Canadian Union of Postal Workers pointed out at the time and as I noted on last night’s Power & Politics (video here), the Conference Board got to a billion dollars in 2020 by starting from an assumed loss of $250 million in 2012. In fact, Canada Post turned a modest profit in 2012.

Declining letter volumes do pose a major challenge to Canada Post. An alternative to service cuts would be to provide new services through the Crown corporation’s existing network of post offices, such as postal banking. We should consider these options rather than being bowled over by the Conference Board’s large but dubious round number.

Erin Weir is an economist with the United Steelworkers union and a CCPA research associate.

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