Canada Post and CUPW have reached an agreement. But that's not the end of the story. The real drama, Tom Walkom writes, is just beginning:
The main event – what to do with the Crown corporation – is set to begin next month.
That’s when a four-person task force set up by Justin Trudeau’s Liberal government is due to report. Chaired by the head of the Quebec Chamber of Commerce, the task force has been told to “identify viable options” for Canada Post.In announcing the move this May, Public Services Minister Judy Foote said that everything except privatization is on the table.
The volume of mail has steadily declined. But the delivery of parcels has become a booming business. And, to take advantage of that fact, Canada Post bought Purolator Courier several years ago. But new circumstances mean that employment for mail carriers is on the line. And it leaves the corporation with two broad choices:
First, it can cut costs and raise stamp prices. This is the strategy that Canada Post management is vigorously following through its cuts to home delivery and its take-no-prisoners approach to collective bargaining with the Canadian Union of Postal Workers (CUPW).The problem it faces is that this strategy is ultimately self-defeating. As service becomes even more inconvenient and expensive, fewer people will use the post office.This can lead only to a death spiral.Second, the post office can cover part of the cost of those operations that lose money by investing in activities that make money.Canada Post already engages in cross-subsidization. The money it earns by delivering junk-mail helps cover the cost of standard mail. Its policy of delivering letters anywhere in the country for the same price acts, in effect, as a subsidy to those who correspond over long distances. Its Purolator parcel delivery segment cross-subsidizes its less profitable post office segment.
The corporation is now considering getting back into the banking business -- something which would benefit small communities. Whatever model the post office adopts, changes are coming down the pike.