Canada Post not essential but not irrelevant, say experts

While returning some items at Ikea, Conservative MP Lisa Raitt, the former federallabour minister, decided to weigh in through Twitter on the possible Canada Post lockout and, more existentially,the essential nature of the Crown corporation itself.

Raitt ruminated that if Canada Post "is not essential, whydo we let it have a monopoly? Open it up." Ifit is essential, she said, the government should draft an "appropriate law after an appropriate time."

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If by essentialonemeans that 100 per cent of the population needs Canada Postfor 100 per cent of communication projects, then, no, it's not an essential service anymore,saysMountAllison University president Robert Campbell, who has studied post offices around the world.

'All sorts of alternatives'

"There are all sorts of alternatives," he said. 'But I think for a non-trivial part of society, it still is a quasi-essential service in the sense they rely on it for their livelihoods or they rely on it for their peace of mind."

In adigitizedworld, for the increasing number of people whorarely use the mail anymore, alockout would likely be greeted with ambivalence,Campbell said.

"And that's going to be terrible for Canada Post because the last thing in the world that you want is to have a large, increasing number of people saying you're irrelevant."

But there's a significant portion of society that still relieson the service, he said.There arestill a lot of people who like and, moreimportantly, trustphysical, tangiblecommunications, for examplewhenthey dealwithlegal documents or finances.

And the service continues to be important forpeople in rural areas orsmall areas, and for small and medium-sizedbusiness, as well as for people who need the peace of mind provided by contact withthe outside world older and isolated people.

"[A lockout] will be hugely anxiety-making for them. And so it's anoddsituationwhere a non-trivial part of society will say 'what's the difference, who cares,' and the otherswill say 'this is the end of the world.'

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For Canada'sfirst 150 years,before television andradio,the post office department was not only an essential form of communication but alsoessentialfor nationbuilding,said Ian Lee,an assistant professor at Carleton University'sSprottSchool of Business.

Thatwas the only way forpoliticians to communicate withpeopleacross Canada, said Lee, whose study Is the Cheque Still in the Mail?, which looked into the future of Canada Post, was publishedlast year by theMacdonald-LaurierInstitute.

"It was the internetand radio and TVand telegraphand telephone all rolled into one technology called the post office," Lee said. "It was a hugely important institution."

It later became a critically importantinstitution as a veryimportantpartnerin the payment system in Canada.But that was disrupted by the invention of the fax machine, followed by digitizationtheinternet, e-commerce, online banking.

Disrupted by technology

"The post office, which once was unbelievablyimportant in this country ...has successively beendisrupted by successive waves of technology,"he said.

Currently, 75 per cent of all the volumes in Canada Post is letter and junk mail, Lee said. But those volumes have been decliningannually, he said.

Cheque writinghas almost disappeared with digital payments. And, according to Service Canada, roughly 98 per cent of most government paymentsare now electronic deposits.

All this means that over the next 10 years, physical letter mail will continue to collapse, particularly as the older generation, which uses it most intensively, dies.

Yet Lee noted that the future is not bleak for Canada Post, as25 per cent of itsmail, parcel post, has been growing very rapidly because of the explosion of e-commerce. And that is where itsfuture should lie.

He said Canada Posthas been quietly transformingitself over the last five years and is doing very well. But he said it has less than 10 yearsto transform itselfto a pure parcel postcarrier.

"They do have a future but they're going to have to reinvent themselves."

How Canada Postreinvents itself, Campbell said, is a decision for the government, not the Crown corporation.

No one wants to put tax dollars into Canada Post, he said, but it's still considered a public service, "so everytime they do anythingthat offends our notion of what a public service should be doing, we get all uppity."

"The governmenthas to say to CanadaPost: 'This is what we believeuniversal service to Canadiansshould be for the next 10 years.'"