What to do with Canada Post?

[The_Squid]

No doubt....shipping to Canadians after an ebay or other online auction is a pain in the backside. So many fees, delays at customs, poor tracking systems, etc. I won't ship to Canada anymore...too much hassle. Fortunately, many bidders have a U.S. based work around. Seeing "Canada Post" is the kiss of shipping death.

Border delays, brokerage fees, duties and taxes are not a pain to the vendor at all. What are you even talking about? You are just trolling again...

And why does an American who doesn't ship stuff to Canada care about Canada Post? Hypocrite.

[bush_cheney2004]

Border delays, brokerage fees, duties and taxes are not a pain to the vendor at all. What are you even talking about? You are just trolling again...

And why does an American who doesn't ship stuff to Canada care about Canada Post? Hypocrite.

They are a pain to this "vendor". This "troll" has items that Canadians want but can't get in their teenie tiny market, so many turn to the U.S. for better selection and price...new or used. Canada Post is a barrier to such commerce. Frankly, it sucks....

[TimG]

So far they've run 1 deficit in 16 years.

And that one deficit is due to pension liabilities. As Canada Post downsizes any public subsidies will only go to prop up the unfunded pensions and not to provide service to rural areas. It makes more financial sense to let Canada Post collapse and allow a new entity that would use the subsidies to provide service instead of pay pensions:

http://news.nationalpost.com/2013/12/16/canada-posts-6-5-billion-shortfall-just-a-fraction-of-more-than-150-billion-in-unfunded-federal-pension-liabilities/

Edited December 16, 2013 by TimG

[Bonam]

Border delays, brokerage fees, duties and taxes are not a pain to the vendor at all. What are you even talking about?

He was talking about ebay. And yes, such delays and fees are indeed a big pain to the vendor, the first time a discontented ebay buyer decides to leave a negative feedback with the seller because of shipping issues.

Edited December 16, 2013 by Bonam

[Wilber]

He was talking about ebay. And yes, such delays and fees are indeed a big pain to the vendor, the first time a discontented ebay buyer decides to leave a negative feedback with the seller because of shipping issues.

They are a pain regardless of how one ships. It is not really a post office issue.

[Wilber]

And that one deficit is due to pension liabilities. As Canada Post downsizes any public subsidies will only go to prop up the unfunded pensions and not to provide service to rural areas. It makes more financial sense to let Canada Post collapse and allow a new entity that would use the subsidies to provide service instead of pay pensions:

http://news.nationalpost.com/2013/12/16/canada-posts-6-5-billion-shortfall-just-a-fraction-of-more-than-150-billion-in-unfunded-federal-pension-liabilities/

Yup, blow it up and declare bankruptcy. Thing is, it isn't just the pensions you would be blowing off, it would also be all your suppliers, creditors and customers that depend on you as well. Can a crown corp even declare bankruptcy or CCAA? I don't know.

One thing they could address is indexing. Very few private DB pensions that I know of are indexed.

Edited December 16, 2013 by Wilber

[guyser]

And why does an American who doesn't ship stuff to Canada care about Canada Post? Hypocrite.

Because it fits the long established mandate, one that precludes the knowledge that it works in reverse . Yanks do buy postal boxes in Canada for the same reason.

[TimG]

One thing they could address is indexing. Very few private DB pensions that I know of are indexed.

I think cutting pensions to levels that are sustainable given the future size (i.e. smaller) of Canada Post would be best but the trouble is unions are notoriously unwilling to compromise without a crisis. Letting Canada Post fail is the only way to get the unions to put serious concessions on the negotiating table.

I realize that letting Canada Post fail is harmful in other ways but simply dumping taxpayer money into it without any benefit rollbacks is much more harmful in the long term.

Edited December 16, 2013 by TimG

[hitops]

Yeah? When? Citation please.

You need a citation to know that the middle class was born in America and more people entered into it from poverty than anywhere else? I suppose you also need proof that we breath oxygen.

Maybe what you're talking about is the current decline in median incomes over the last few years. This decline parallels well the increase in size and scope of government.

The unemployment rate varies widely. Switzerland 4% Austria is 4.6%, Germany 6.3, Denmark 7. Most of the higher unemployment countries are in eastern Europe and southern Europe. And that's not because they're not cutthroat places like the US, but because they had poor systems and governments in place and other systemic issues. Some are higher than the US rate, some lower.

Guess what happens when you have no minimum wage, such as in places like Austria, Switzerland, Germany, and Denmark? I'll let you try to figure it out.....although I'm not holding my breath. If you're saying we imitate this, I'm all for it.

Perhaps we should shoot for Switzerland since they are the lowest rate according to you......the country with no national health service and almost no government contribution to unemployment insurance. The one where the planning for unemployment insurance is up to the individual? The host of safe haven banking for world elite and corporations? The nation that recently rejected a CEO pay cap by a margin of 2:1? Great example, sounds consistent with your values and really makes your point!

It figures you would try to pick the absolute best European countries that in know way reflect the large safety nets you are talking about, and avoid the ones with the big safety nets which are currently economic disasters such as France and Spain. Unlike the nation you mention, they have huge comprehension social systems, health care, generous workers protections, mass unionization etc. They run unemployment rates of 27% and 11% respectively, and people are running from them like the plague.

Everyone whines about big government, but everyone wants it to do everything to solve every problem too.

No we don't.

You want programs that help disabled people and pay them? You got to hire people for that. You want to distribute money to parents who have small children? Someone has to administer those programs. You want a massive GST collection and redistribution system? That takes a lot of administrators. You want complicated pogey systems, a variety of public pension systems, grants for business, farms, fishermen, for tourism, for french and ethnic cultural festivals and organizations, all that takes cash and administrators. Everyone wants to cut taxes, but try cutting programs and watch the outcry! The tories cut a couple of small programs that fed money to a few artists in Quebec and it cost them half their support in that province!

Nope, many of us don't want much of that.

Get it through your fat head that the more things government does the more employees it needs. Nor are they all sitting around the wine fountains at works while clerks wave palm fronds at them. Of the three people I've spoken to about their work in the last week.

Get it through your fat head that we don't want more government, with more employees. We could government services in half and eliminate whole department, and be better for it. Government workers get wages, benefits and pensions that similar private sector workers do not, yet are forced to fund. It's disgusting and unethical.

And before you froth over CEO pay, I don't have to pay any CEO one dime I don't want to. I HAVE to pay government workers, whether I want to or not. That's why there's no comparison.

Edited December 16, 2013 by hitops

[overthere]

And that one deficit is due to pension liabilities. As Canada Post downsizes any public subsidies will only go to prop up the unfunded pensions and not to provide service to rural areas. It makes more financial sense to let Canada Post collapse and allow a new entity that would use the subsidies to provide service instead of pay pensions:

http://news.nationalpost.com/2013/12/16/canada-posts-6-5-billion-shortfall-just-a-fraction-of-more-than-150-billion-in-unfunded-federal-pension-liabilities/

IMO, they should have cut home delivery everywhere in the 1980s. When CPC became a Crown Corp, they got two big advanatges: the first class monopoly , and they got a lot of real estae and equipment assets for free.

CPC cannot fix the pension situation, period. They are $6 billion in the hole, and growing. Despite CPC being a supposedly independent, revenue dependent entity the hole they dug themselves is too deep. There is no way out, the taxpayers are going to foot the bill for postie pensions.

And all the announcements about downsizing through attrition, cutting back delivery and raising stamp prices dramatically are all just delaying the inevitable. The first class mail protectionist monolpoly has to go- it is increasingly pointless as both businesses and consumers find ways to get around it. When they jack up prices, it will also cut first class volumes even more.

They are in a death spiral now. Harper may as well cut our losses by eliminating the monopoly now. We can still sudisdize rural and remote delivery, just as we do now, without pretending not to be. And it won;t be that expensive, the volumes going to Iqaluit and CowMuffin, SK are not large.

Disclosure: I know a lot about Canada Post operations because I used to work in their buildings doing signficant contractor things. One of the things they dont talk about much lately is just how horrible their labour relations remain. It's a testament to how bad their senior and middle management has been for a long time. The only reason they have had relatively calm unions recently is that the unions know they are in a seriously sunset business and are just hanging on to what they can while they can.

I think a lot of that is going to change soon.

[cybercoma]

You don't think Amazon already did that? Apparently CP delivers packages cheaper and more reliably than the courier companies.

substantially cheaper. UPS is upwards of 4x the cost and I live in a city on the east coast, not some rural route.

[overthere]

substantially cheaper.

If we as taxpayers are on the hook for large operating deficits and truly massive unfunded pension liabilities, I don't reckon there is anything 'substantially cheaper' about Canada Post delivery costs. It's a long term shell game, and now it is time for all of us to pay for your cheap parcels.

[waldo]

If we as taxpayers are on the hook for large operating deficits and truly massive unfunded pension liabilities

as it stands, Canada Post has $16 billion in market assets... along with a $6.5 billion solvency deficit; a solvency deficit only comes to pass if an entity... goes solvent. Are you projecting that for Canada Post? As predicted, Harper Conservatives have provided a 4 year extension on pension payment structuring. Accordingly, you're ahead of any semblance of presumed "solvency".

[overthere]

"as it stands, Canada Post has $16 billion in market assets... "

that is strictly, strictly book value.......

In reality, the market price would be far lower. Purolator is worth maybe $1 billion on the market and while profitable their profit ratios are well below industry standards and well below competitors like UPS and FedEx so a sale would not get any kind of premium.

Much of the supposed CPC 'value' is in the business itself, but unprofitable businesses have no goodwill value, partiuclarly ones where their customers are fleeing en masse. They do own real estate but in some cities- Vancouver, Edmonton, Calgary for instance they no longer have big chunks of downtown. They own a billion or so in sortation equipment, much of it newer. But.... it is worth pennies on the dollar as it is specific to their industry- who would buy it at anything close to what they paid?

Harper is just delaying a decision regarding the pension liability, in the end no buyer will assume that liability because there is simply not 6 billion worth of gravy in the business- not for CPC, and not for anybody else either.

Stick a fork in them they're done like dinner. All they'll do in the next few years is seriously piss off their remaining customers as they charge them exorbitant postage in an effort to stay afloat. CPC always counted on the legislated monopoly to save their bacon, but the Internet was an end run they did not see in 1981 and cannot counter now. Harper and subsequent govts will wank about pretending that the inevitable isn't inevitable. Once the community mailboxes are implemented everywhere it will be easier to get rid of the rest and farm it out to contractors. Oh, and pay pensions for the next half century.

Edited December 17, 2013 by overthere

[waldo]

"as it stands, Canada Post has $16 billion in market assets... "

that is strictly, strictly book value......

no - by definition, market value... more correctly, "fair market value" (FMV). FMV is not book value. Per the 2012 Canada Post Annual Report: "Pension Assets - fair market value: 16,780 (in millions of dollars)"

[Topaz]

I wonder how top heavy the management of CP is? There's also a difference in deliver for cities and rural. The rural has to have their own autos, so there is a cost there to them, but I think they get gas mileage and I'm not sure if they have to pay more on their auto insurance. IF it did go private, would the CEO get the pay that the present CEO gets??? I doubt it.

[Wilber]

Pension assets don't belong to the company, or anyone who might buy it.

[Argus]

You need a citation to know that the middle class was born in America and more people entered into it from poverty than anywhere else?

The middle class was most definitely not born in the United States. As for numbers lifted out of poverty, I'm not sure, but if it was the US it was many, many decades before the advent of Ronald Reagan. Income mobility in the US is well below that in Europe today.

Guess what happens when you have no minimum wage, such as in places like Austria, Switzerland, Germany, and Denmark? I'll let you try to figure it out.....although I'm not holding my breath. If you're saying we imitate this, I'm all for it.

I think you better do a little more research before making that offer. The thing you don't seem to understand is that these countries are so heavily unionized they don't really need a governmental minimum wage. Wages are negotiated on an industry wide basis between industry representatives and labour representatives (often enforced by govt). In Denmark, for example, the average minimum is about $19hr. Germany actually has laws against paying an "immoral wage", which is probably a major reason why Wal-Mart doesn't operate there.

Perhaps we should shoot for Switzerland since they are the lowest rate according to you......the country with no national health service

Health insurance is mandatory in Switzerland. The basic tier has to be offered by insurers to everyone who wants it at no profit, and if it costs more than 8% of a person/family's income the government will step in to pay for the rest.

and almost no government contribution to unemployment insurance.

So? Our government actually takes from the UIC funds. The Swiss system is actually more generous than ours and lasts longer, 70-80% of salary up to two years.

It figures you would try to pick the absolute best European countries that in know way reflect the large safety nets you are talking about,

Well of course I'm picking the best. Do you believe I should advocate we choose the worst? And their social safety nets are quite strong. You simply don't understand them.

Nope, many of us don't want much of that.

Well, there's always been a 'I'm-all-right-jack" system where people who don't need any kind of assistance advocate its removal. After all, it doesn't help THEM, at least, not just now.

Get it through your fat head that we don't want more government, with more employees. We could government services in half and eliminate whole department, and be better for it.

Look, Bubba, I just sent CRA a fat electronic cheque yesterday as part of my quarterly advance payments. I don't like paying taxes any more than the next guy. But at the same time any honest assessment of the systems in the above mentioned countries should readily show that their people live better lives than those in a place like the US, where nobody cares about anyone but themselves. They have less social disorder, less crime, less of almost every kind of social issue, and people are still pretty darn happy.

Government workers get wages, benefits and pensions that similar private sector workers do not, yet are forced to fund. It's disgusting and unethical.

Maybe the ethical thing to do is to try and get living wages and pensions and benefits to other workers, instead of taking them away from those who have them.

And before you froth over CEO pay, I don't have to pay any CEO one dime I don't want to. I HAVE to pay government workers, whether I want to or not. That's why there's no comparison.

CEO pay is part of the expenses of the company, and thus contributes to the cost of whatever you buy. The fact that so many of the extreme rich then use this money to help lobby government in order to make their lives better and everyone else's life worse is the real concern, though. The declining amount contributed by corporations and the wealthy to the public fisc over the last forty years is a direct result of their bribery of politicians. And, to be honest, I find it 'disgusting' how these corporate heads crack down viciously on their workers wanting higher wages, do their best to squeeze every possible drop out of them, while basking in riches and wealth themselves.

[Argus]

I wonder how top heavy the management of CP is?

Very, and they're a nasty bunch, let me tell you.

[bush_cheney2004]

.... But at the same time any honest assessment of the systems in the above mentioned countries should readily show that their people live better lives than those in a place like the US, where nobody cares about anyone but themselves. They have less social disorder, less crime, less of almost every kind of social issue, and people are still pretty darn happy.

Sure....that would explain so much European emigration to the United States, and their lower standard of living. Dishwasher? Who needs a dishwasher ? That's so...American !

Edited December 18, 2013 by bush_cheney2004

[ReeferMadness]

It is an assumption - but one that very unlikely to be wrong. We can never no for sure unless the government commits to ending the Canada Post monopoly.

Sounds like Harper's entire plan. Make an ideological assumption and proceed. When you screw it up, that's OK because NAFTA ensures that you can never bring the business public again.

[ReeferMadness]

Very, and they're a nasty bunch, let me tell you.

So, you know them personally, then. Neighbors of yours?

[hitops]

The middle class was most definitely not born in the United States. As for numbers lifted out of poverty, I'm not sure, but if it was the US it was many, many decades before the advent of Ronald Reagan. Income mobility in the US is well below that in Europe today.

You are relying on assumption that moving from one quintile in Europe is the same as doing so in the US. It's not, because people have more opportunity to earn more in the US, the quintiles are larger. You need to move up higher on the ladder to move quintiles in the US, so the apparent mobility is lower when using that kind of assessment.

I think you better do a little more research before making that offer. The thing you don't seem to understand is that these countries are so heavily unionized they don't really need a governmental minimum wage. Wages are negotiated on an industry wide basis between industry representatives and labour representatives (often enforced by govt). In Denmark, for example, the average minimum is about $19hr. Germany actually has laws against paying an "immoral wage", which is probably a major reason why Wal-Mart doesn't operate there.

There is no definition of a moral wage in Germany, it's conceptual. If the workers can demand those kinds of wages, let them demand them or go elsewhere. There is no need for government to artificially manipulate it.

Well of course I'm picking the best. Do you believe I should advocate we choose the worst? And their social safety nets are quite strong. You simply don't understand them.

No you are mispresenting the reality of the European welfare state, by pointing to only the most effective systems. The reality is that most European nations who attempt such systems are sinking under them. The ones you selected are not the most comprehensive ones. Furthermore, you selected some of the nations with the whitest, most homogenous populations. Those nations do better on every metric, not just economic outcomes, so such a selection muddies the waters. You have avoided the largest, most relevant examples of more multicultural because they are economic disasters.

Well, there's always been a 'I'm-all-right-jack" system where people who don't need any kind of assistance advocate its removal. After all, it doesn't help THEM, at least, not just now.

Many systems that you probably believe help me other than you or me, actually just hurt the majority in the long term.

Look, Bubba, I just sent CRA a fat electronic cheque yesterday as part of my quarterly advance payments. I don't like paying taxes any more than the next guy. But at the same time any honest assessment of the systems in the above mentioned countries should readily show that their people live better lives than those in a place like the US, where nobody cares about anyone but themselves. They have less social disorder, less crime, less of almost every kind of social issue, and people are still pretty darn happy.

Anytime you have a white, homogenous population with high education levels and a western Judeao-Christion cultural heritage, you get those results. This is true everywhere. That's not because of their government. You take the same ethnic demographic groups in the US or Canada and evaluate their mobility and success, and you will get the same or better results. Now before you go accusing me of being racist because this is easier than trying to be relevant to the discussion, note that Asian and Indian immigrants to the west perform even better. Cultural attitudes are far more important than government systems.

CEO pay is part of the expenses of the company, and thus contributes to the cost of whatever you buy. The fact that so many of the extreme rich then use this money to help lobby government in order to make their lives better and everyone else's life worse is the real concern, though. The declining amount contributed by corporations and the wealthy to the public fisc over the last forty years is a direct result of their bribery of politicians. And, to be honest, I find it 'disgusting' how these corporate heads crack down viciously on their workers wanting higher wages, do their best to squeeze every possible drop out of them, while basking in riches and wealth themselves.

Corruption is always a problem. You don't avoid that with more government, actually you usually increase it. When gov can give out goodies, corporations and individuals will try to get them. More gov = more goodies = more attempts to get them.

The idea that CEO pay is actually making life more expensive for you, is laughable. It's a drop in a bathtub, compared to the total cost of providing you goods and services and has literally no impact on pricing. Let's take a favorite target, exxon mobile. Revenues are nearly 400 billion, with 30 billion in profits. The CEO makes $40M. This salary to profits ratio is roughly 0.1%. The value they add matters a great deal to shareholders, which is why they hire him/her. Not because they are secret BFF's lol. I'm just trying to imaging shareholders deciding they should hire a guy with no ability because he's in the 'in-club'. "Hey why don't we potentially devastate our portfolios by hiring this well-connected guy with no clear ability to make this corp a success. Ya ok!" lol you're in bizarre world in this one. There is literally no incentive to do that. I suspect you have no experience in business or investing whatsoever.

Nobody begrudges Steve Jobs. He took apple stock from $17 to $700. Many billions in profitability and shareholder value is easily worth many millions in compensation. The guy before him didn't do that, and guy after him is losing stock value. CEO's matter. It's not a secret conspiracy just because that confirms your inner narrative. It anyone could do it, anyone would do it, and you'd see billion-dollar companies being founded by Joe Blow all the time. You don't.

Edited December 18, 2013 by hitops

[overthere]

"no - by definition, market value... more correctly, "fair market value" (FMV). "

what is the market value of Canada Post today? No, not using Canada Post assumptions, but in the real world?

I don't think there are any buyers, period, not with their a) cureent balance sheet and prospects for the future, where they are intent on driving away their remaining business.

Would you buy it? Would anybody sane buy it?

Maybe they could bundle the sale of Canada Post with a typewriter manufacturer for added value.

[overthere]

Very, and they're a nasty bunch, let me tell you.

They are actually less top heavy than they used to be, and their executive people are more competent, less old boys and political hacks than previously.

It won't matter though, nothing can fix their business now.

I agree they are a nasty bunch.