Why Canada Post still matters
There is a still a need for old-fashioned service
The cheque is in the mail, extra gravy with your fries, more salt for your steak, keep those cards and letters coming in. All of the above expressions are becoming as obsolete as TV sets with “rabbit ears,” eight track tapes and disco balls. Stacks of mail in the old-fashioned roadside letter receptacle are also rare sights these days, even when Canada Post is not backed up by labour unrest.
Another series of strikes by Canadian Union of Postal Workers has ended, but “deliveries will be delayed during the peak holiday season and into January 2019,” Canada Post reported last week.
The big clogs in the system are caused by the high volumes of Christmas purchases while letter mail “should be cleared and deliveries current before December 25.” Who cares? Good question. Here’s another compelling query: How often do you use the conventional snail mail?
Technology and past postal strikes have reduced citizens’ and businesses’ reliance on Canada Post.
In the average household, traditional service, with a hard copy being delivered into a real box, has become a distant memory. Electronic financial transactions and e-commerce, despite their inherent security risks, have become routine.
Six years ago the federal government did away with cheques in favour of direct deposit.
The cost to produce a cheque then was about 82 cents while a direct deposit payment cost about 13 cents. Provincial governments have followed suit, moving away from paper to electronic payments.
At one time, when people used Canada Post to send Christmas cards and packages, postal strife during the season of peace and good will were quite common. With every service interruption, business people devised new ways to reduce their dependence on an unreliable service.
Although the courier business has become a viable alternative, many businesses still use Canada Post because there is not yet a cost-effective alternative to the Crown corporation.
Thus, any disruption in the vital, yet imperfect, postal service can create major problems for numerous small entrepreneurs.
That is why many were cheering the federal government’s decision to force striking CUPW members to go back to work.
“As Canada Post works to reduce the backlogs, which represent a significant operational challenge, the health and safety of our employees will remain our highest priority,” the corporation has said.
The guffaws you hear come from union people who claim the employer cares not a whit about the welfare of its employees.
“From now until the holidays, there will be 315 disabling injuries among postal workers, rural and suburban postal workers will work 250,000 hours without pay, and urban postal workers will work thousands of hours of forced overtime, all because the government has not respected these workers’ constitutional rights,” stated Ontario Federation of Labour President Chris Buckley.
CUPW members “suffer the most injuries of any profession, are being forced to work long hours of overtime, and face pay inequalities that should not be tolerated in any workplace,” he complained.
It is true that it is difficult to walk a kilometre in the shoes of a letter carrier, particularly when most of the cargo consists of parcels. Rural delivery people face challenges as well. When the long hours and wear and tear on vehicles are calculated, the contractors who bring the mail to country folks are barely breaking even.
“The right to strike is enshrined in the Charter of Rights and Freedoms. All Canadians should be concerned by the ease with which the government has stepped in to ignore workers’ rights and end this job action,” cautioned Mr. Buckley. OK, so individual constitutional rights have been undermined. But a person can worry about erosion of rights and still demand that Christmas presents arrive before December 25.
While CUPW members were returning to their jobs, Canada Post reported a $94 million loss in the third quarter, “mainly due to the costs of implementing the final pay equity ruling, which will adjust how much delivery employees in suburban and rural Canada are paid.”
If not for the pay equity costs related to prior years, the Corporation would have reported a small profit before tax for the first three quarters of 2018. The impact of pay equity and ongoing rotating strikes are major factors in the Corporation expecting to end 2018 with a loss.
Canada Post expects pay equity will cost approximately $550 million by the end of 2018, and will cost approximately $140 million annually.
But at the same time, Canada Post remains the country's leading parcel delivery company; parcels revenue increased by $106 million or 21.2 per cent in the third quarter, and volumes increased by 14 million pieces or 23.3 per cent compared to the same period in 2017.
Domestic parcels, the largest product category, continued to grow, as revenue increased by $92 million or 25.7 per cent and volumes grew by seven million pieces or 18.1 per cent in the third quarter.
The postal system is still around because of the money it makes on delivering online purchases.
Meanwhile, the volume of “Transaction Mail,” comprised of letters, bills and statements, continues to plunge.
These numbers decreased by 35 million pieces or 4.6 per cent in the third quarter and revenue decreased by $24 million or 3.6 per cent, compared to the third quarter of 2017.
In the first three quarters of 2018, Transaction Mail volumes decreased by 119 million pieces or 4.9 per cent and revenue decreased by $103 million or 4.6 per cent, compared to the same period a year earlier.
“The ongoing decline in mail volumes, due to the use of digital alternatives, remains a significant challenge for the Corporation,” Canada Post points out.
Like many other things in life, postal service has changed dramatically in recent years. It seems that the demise of Canada Post is not exactly inevitable. And that is good news for those who still need a traditional and much maligned institution.