Ottawa clears path to success

With its new plan, the Trudeau government has created an opportunity for success. Now it must put in place leaders ready and able to seize it

The Trudeau government’s largely sensible plan to reform Canada Post will disappoint many. That was inevitable.

The recent parliamentary hearings on the future of the Crown corporation, which has been painfully slow to adapt to the digital age, made perfectly clear that there is little agreement about the dimensions of the problems the institution now faces or how it can best overcome them.

But Ottawa’s plan, while likely doomed to unpopularity, rightly begins with the few points of agreement that did emerge: that universal mail delivery remains an important mission, one that was threatened by the move to end door-to-door service. That to become sustainable, Canada Post must innovate, adjusting its model for a changing world, not only to cut costs, but also to improve service. And that the acrimonious relationship between management and the mail carriers’ union is a long-standing obstacle to progress that must be addressed.

Most important, the plan delivers on the vague Liberal campaign promise to “save door-to-door delivery” by stopping the move, begun under the Harper government, to replace service to homes with so-called community mailboxes. Canada Post estimated that this would save the institution some $400 million, but many elderly citizens and people with disabilities living in affected areas have found it difficult or impossible to access their mail.

Those understandably concerned about the Crown corporation’s broken business model will undoubtedly question the fiscal responsibility of such a move. But the government was right to extend the moratorium. Universal access is Canada Post’s raison d’être — and among the many possible costcutting measures (say, for instance, delivering twice or three times weekly, rather than daily), ending door-to-door service was particularly detrimental to that mission. Moreover, some, including the parliamentary committee that studied the issue, have suggested the Crown corporation’s estimates of how much it would save were based on dubious data and were likely overstated.

The Liberals will not, however, “put the toothpaste back in the tube,” as Public Services Minister Carla Qualtrough said on Wednesday. That is, the roughly 840,000 families currently relying on community mailboxes will not see their service restored. Instead, the government will establish a task force to deal with accessibility issues that have arisen in those communities.

Many will no doubt be let down by this plan. Yet the government has good reason to consider whether there are alternatives that don’t require an expensive reversal.

Ottawa will also change some of the labour and financial rules governing Canada Post to create incentives for innovation, a historical weak point for the Crown corporation. Despite the existential threat posed by disruptive digital technologies, Ottawa for too long allowed Canada Post to drift. By one estimate, the organization could be hemorrhaging $700 million per year by 2026.

But as the parliamentary committee and the new plan suggest, the digital world has also created opportunities for Canada Post, which the institution has been slow to grasp.

The rise of online retailers has prompted a surge in parcel delivery, which national mail services in other countries have turned to their great advantage. Meanwhile, the increasing use of remittance services, which allow foreign workers to transfer money to their home country, has also created a revenue opportunity. There are many other suggestions, including that Canada Post’s penetration into the most remote corners of the country might allow it to help with delivery of broadband internet service.

Overall, the government’s plan is less a plan than the removal of long-standing impediments to Canada Post’s success. It does not impose a solution, but points to potential paths and enables the arm’s length organization to pursue them.

Much, then, will depend on the people appointed to run the Crown corporation. The current regime, headed by outgoing CEO Deepak Chopra, has been noted for its reflexive adherence to the status quo, its refusal to innovate, its pugnacious approach to labour relations and its undemocratic secrecy at a time of great uncertainty. With its new plan, the Trudeau government has created an opportunity for success. Now it must put in place leaders ready and able to seize it.