What to do with Canada Post?

[TimG]

Can anyone point to a modern country, similar to Canada's geography and population, that has a privatized and competitive national mail system? It would be interesting to be able to compare the two systems.

We have a privatized telecommunication system. The size of the country requires direct subsidies to rural areas but there is no reason that the same model could not be applied to first class mail. Edited July 4, 2016 by TimG

[Moonbox]

Can anyone point to a modern country, similar to Canada's geography and population, that has a privatized and competitive national mail system? It would be interesting to be able to compare the two systems.

Well since there aren't really any countries anywhere with similar geography to Canada, you're not really going to find anything even remotely comparable.

If would like to compare public vs private, however, you might want to read up on the privatization of Germany's Bundepost (now Deustche Post) and how the now-private Deustche Post is under-cutting its own business with a lower-cost subsidiary to reduce the number of employees under onerous compensation agreements in the postal union. It's kind of sneaky, but it's also interesting to see that the new subsidiary enjoys an upwards of 30% labour cost advantage over the main carrier. Who do you think pays the difference?

Edited July 4, 2016 by Moonbox

[Smallc]

Germany doesn't have anywhere the remoteness that Canada does. That's not to say that things can't be changed to save money, but it's not a similar circumstance, as you already said.

[Moonbox]

Well our more remote locations will probably always need some sort of subsidized postal service, which is fine. I think the more reasonable among us are more than willing to make sure Joe Canada living in Polar Bear Falls has access to basic services. This does not, however, provide any rationale for paying 15-30% premiums on low-skill, low-educated mail delivery wages. The two issues are as unrelated as possible.

[Smallc]

Well our more remote locations will probably always need some sort of subsidized postal service, which is fine. I think the more reasonable among us are more than willing to make sure Joe Canada living in Polar Bear Falls has access to basic services. This does not, however, provide any rationale for paying 15-30% premiums on low-skill, low-educated mail delivery wages. The two issues are as unrelated as possible.

You'll get no argument from me there.

To be fair, we in rural areas don't get much of a subsidy anymore. Anything larger than a letter is charged huge amounts. It's come to the point where I have to have Amazon packages delivered to the city an hour away, as something as simple as a book can cost $70 in shipping.

[cybercoma]

You'll get no argument from me there.

To be fair, we in rural areas don't get much of a subsidy anymore. Anything larger than a letter is charged huge amounts. It's come to the point where I have to have Amazon packages delivered to the city an hour away, as something as simple as a book can cost $70 in shipping.

And there's far more remote places than yours even in Manitoba.

[The_Squid]

So people want to subsidize remote ares, but give the profits of the profitable routes to a private company to pay people less and reduce services. Doesn't make any sense.

[overthere]

It's absolutely subsidized and it's either supremely ignorant or naive to say it isn't. While the government might not be writing them cheques directly, they maintain the monopoly that Canada Post has on regular mail and ensures that nobody can compete with them for that business. Wages and benefits are being artificially subsidized by the lack of competition and the businesses and consumers that still use the mail and have no other options pay for this subsidy.

You are about a decade+ late with that comment ..... The monopoly is only on first class lettermail, and it did help Canada Post initially. The other leg up that the govt gave CPC was a bundle of real estate. It was mostly old buildings that had none of the modern sorting equipment required, but still it has proven useful. But they do not give them any money to survive, that was and is the deal.

The arrangement was useful to CPC until perhaps 15 years ago when the advent of the internet started to seriously erode the monopoly(which again is only on pone segment of their business). The leakage of revenue from lettermail was linked directly to the huge cuts in volume. The first class lettermail monopoly has become a liability, since contingent with the monopoly was a commitment that they must deliver mail everywhere.

Your small business may be so poorly organized that you rely solely on increasingly expensive and increasingly unprofitable lettermail, but the tables have turned. CPC is subisdiziing you, not the other way around. They do it solely because they have to under their old charter. CPC management recognized this long ago and have invested very heavily in the business they see as their future: delivering parcels ordered on the internet. The proof of this is a glance inside their modern, mechanized distribution plants found in every major Canadian center. They are filled with huge parcel handling equipment.

[Topaz]

As long as the CEO and his VP's are raking in more than 10 million in salaries, they have no right to say they can't give more out to the workers! I think business and the governments will suffer more than people on a strike.

[The_Squid]

As long as the CEO and his VP's are raking in more than 10 million in salaries, they have no right to say they can't give more out to the workers! I think business and the governments will suffer more than people on a strike.

Where do you get "10's of millions"? The CEO makes about $500k / year.

[Argus]

This lockout or strike is not really about pay. It's about pensions. Canada Post wants to radically change the pension agreement with the union. It is the first crown corporation to try to switch from the normal government pension scheme to one of those private sector 'defined contribution' plans. There's no way the union is going to meekly submit to that. No union would, however moderate. And you can expect all the other government unions to support them heavily since they see this as the thin edge of the wedge and will be protecting their own pensions.

[Wilber]

Well since there aren't really any countries anywhere with similar geography to Canada, you're not really going to find anything even remotely comparable.

Australia

[Topaz]

Where do you get "10's of millions"? The CEO makes about $500k / year.

The last time the CP had a strike in waiting , I went online to find out about the CEO and the salaries and the info. said 10 million for the CEO and all of the 15-16 VPs and I'm sure they probably have had a raise since then. Let's go private and see how many of them still have a job and that kind of salary.

[Wilber]

The last time the CP had a strike in waiting , I went online to find out about the CEO and the salaries and the info. said 10 million for the CEO and all of the 15-16 VPs and I'm sure they probably have had a raise since then. Let's go private and see how many of them still have a job and that kind of salary.

I think you would find that 10 million total for the top 15 execs in a corporation with 65,000 employees and 8 billion in revenues is probably not very high by private standards

[The_Squid]

The last time the CP had a strike in waiting , I went online to find out about the CEO and the salaries and the info. said 10 million for the CEO and all of the 15-16 VPs and I'm sure they probably have had a raise since then. Let's go private and see how many of them still have a job and that kind of salary.

So if 5-600k is too much for the CEO, what would you consider fair compensation?

[Big Guy]

It would be interesting to know how much the Postal Worker Union has in its war chest - because they will need every penny!

I remember in 1965 when the union had some teeth. Our economy was based on the assumption that the postal service could be counted on to process communications. I remember the inconveniences that a postal strike created for me personally. I felt captive by the actions of that union. The postal unions went militant and were controlled by the Quebec wing.

Subsequent flexing of union muscles was the greatest initiative for digital communications in Canada. It also led to an explosion in the number of private businesses prepared to deliver parcels.

Now I see the union prepared to strike on two major issues (according to them) - pensions and equity.

The pension issue is not for the existing workers but FOR FUTURE EMPLOYEES! Union stewards are asking people to stop working, taking a financial hit for somebody who will be hired in the future. This is ideology and certainly not rational representation of the existing members. If I was a member of that union I know where I would tell them to stick that request.

This latest job question is only bringing to the forefront the growing irrelevance of Canada Post.

WHAT TO DO WITH CANADA POST?

Let the union lead it into oblivion!

Edited July 5, 2016 by Big Guy

[?Impact]

The last time the CP had a strike in waiting , I went online to find out about the CEO and the salaries and the info. said 10 million for the CEO and all of the 15-16 VPs and I'm sure they probably have had a raise since then. Let's go private and see how many of them still have a job and that kind of salary.

The CEO of Federal Express makes $14million/year by himself.

[Moonbox]

You are about a decade+ late with that comment ..... The monopoly is only on first class lettermail, and it did help Canada Post initially. The other leg up that the govt gave CPC was a bundle of real estate. It was mostly old buildings that had none of the modern sorting equipment required, but still it has proven useful. But they do not give them any money to survive, that was and is the deal.

The arrangement was useful to CPC until perhaps 15 years ago when the advent of the internet started to seriously erode the monopoly(which again is only on pone segment of their business). The leakage of revenue from lettermail was linked directly to the huge cuts in volume. The first class lettermail monopoly has become a liability, since contingent with the monopoly was a commitment that they must deliver mail everywhere.

The arrangement was "useful" he says. Nice understatement. The letter mail monopoly isn't really a burden either. The real burden is the unreasonable wages/benefits paid to the postal workers and about $7B in unfunded pension liabilities. We'd be far, far better off specifically subsidizing letter delivery to remote locations and dismantling the letter monopoly than we are having to deal with the bloated, dying whale that is Canada Post. The most ironic part of the potential strike/lockout, however, is that the wage/benefit demands being made are ultimately hastening the end of this monopoly - a monopoly that benefits letter carriers and postal workers more than anyone else.

CPC is subisdiziing you, not the other way around. They do it solely because they have to under their old charter. CPC management recognized this long ago and have invested very heavily in the business they see as their future: delivering parcels ordered on the internet. The proof of this is a glance inside their modern, mechanized distribution plants found in every major Canadian center. They are filled with huge parcel handling equipment.

What does that prove? Nothing other than that regular mail was a rapidly declining business, which we already know. As for what's being subsidized, see above.

Edited July 7, 2016 by Moonbox

[eyeball]

The CEO of Federal Express makes $14million/year by himself.

I figure any corporation that can afford to pay their CEO's that much can afford to pay more taxes, a lot more.

[The_Squid]

Australia

How does this make a point for a privatized postal company???

Australian Postal Corporation (formerly the Australian Postal Commission) is the Australian-Government-owned entity responsible for the services.

https://en.m.wikipedia.org/wiki/Australia_Post

[?Impact]

How does this make a point for a privatized postal company???

Yes, it is amazing how many times Australia is used as an example of 'privatized' postal service when it essentially is just a crown corporation like CanadaPost has been since 1981. I guess Canada is an example of 'privatized' postal service as well. Sweden and Denmark formed a joint corporation owned by the two governments, so they are not really examples either.

[Boges]

Well there goes the reliability of the only profitable part of Canada Post. Perhaps the government can now let competitors can make use of the rates Puralator can offer. 

http://www.cbc.ca/news/business/purolator-strike-stoppage-1.4043630

Package delivery firm Purolator suspended acceptance of new shipments Tuesday after its largest union issued 72 hours' notice of a possible strike, which would commence Wednesday at 4:30 p.m. ET.

The move comes after a majority of the 8,162 Teamsters Canada members who work at Purolator rejected the company's most recent offer in negotiations.

The company, which is majority owned by Canada Post, says it expects that shipments currently in the system will be delivered, but it will stop accepting new parcels as a precaution.

"We look forward to returning to the bargaining table, working diligently to negotiate a new agreement and getting back to delivering our customers' packages," the company said.

Purolator moves about one million packages or parcels a day, and took in more than $1.5 billion in revenue in its most recent fiscal year.

For its part, the union said a mediator has brought the two sides back to the bargaining table Tuesday, and they are now talking. 

The two sides have been negotiating since last August to hammer out a new deal. According to a union release from December, the issues at the time included:

• Contracting out routes to non-union carriers anywhere outside of a 50-kilometre radius of a depot
• Changing the pension plan from defined benefit to defined contribution
• Ending retirement bonuses

[Boges]

JT save door-to-door delivery for those who haven't been converted yet. 

http://www.cbc.ca/news/politics/liberals-end-community-mailbox-conversions-1.4501291

Quote

 

The federal Liberals will today spell out their long-term plan to reform Canada Post, making permanent a freeze on converting home delivery to community mailboxes.

But some 800,000 families who have already started walking down the street for their mail won't see door-to-door delivery restored — a move that's sure to upset postal workers who have demanded the post office turn back the clock on mailbox conversions.

Rather, federal officials tell The Canadian Press that the government will set up a task force to confront any accessibility concerns those 800,000 households and anyone else may be facing, with an emphasis on better serving seniors and people with mobility issues.

 

 

[Argus]

4 hours ago, Boges said:

JT save door-to-door delivery for those who haven't been converted yet. 

http://www.cbc.ca/news/politics/liberals-end-community-mailbox-conversions-1.4501291

And how is it fair that some Canadians get door to door delivery while others have to put on their boots and trudge up the street across the icy roads for it?

This is a typical moronic declaration. They say that Canada Post has to be profitable from now on, and also demand that it improve relations with its unions. By magic, presumably. Because if they maintain the current system they can't stay profitable without cutting salaries and benefits. The Liberals of course, gave few clues as to how Canada Post is to accomplish this, but then, they don't really care. This will carry them through the current election cycle and nothing matters beyond that.

[?Impact]

35 minutes ago, Argus said:

And how is it fair that some Canadians get door to door delivery while others have to put on their boots and trudge up the street across the icy roads for it?

Ok, then those new neighbourhoods with their wide streets and large medians to hold mailboxes can pay for the older neighbourhoods to be upgraded as such - fair is fair. Thinking you can retrofit a solution from vastly different conditions is the issue. Older neighbourhoods tend to have a significantly higher percentage of the population that walks, cycles, and/or uses public transit. I have lived in newer neighbourhoods, all we have is people stopping by the community mailbox in their car; I used to walk, but I was in the minority.