Friday May 18 2018

Like most sensible people, the Canadian Union of Postal Workers (CUPW) sees a 1.8% profit margin on revenues at Canada Post as great news: modestly better than break-even, with some extra cash to reinvest in the service – isn’t that exactly how we want a crown corporation to perform? Of course, it’s on brand for the Motley Fool to throw out conventional wisdom and make an unorthodox proposal to butcher and privatize the Canada Post Group of companies. The thing is, it’s far-fetched and based on little understanding of how the postal system works, therefore no constructive ideas about improving it.

Where CUPW sees potential for new and better services to everyone for addressing the overburdening of postal workers, and for a long-term viable public service, William Ashworth (“Would Investors Buy a Canada Post IPO?,” Motley Fool, 16 May 2018) sees opportunity – or thinks he does.

But to disintegrate the services and leave the public holding the bag for the net-cost elements of the service would hurt us all in the long run. Instead, Canada Post reinvesting its profits in growth and adaptation to our changing needs is the road to long-term stability and relevance. Minister Carla Qualtrough, responsible for Canada Post, said as much in January as the outcome of an intensive federal postal service review held in 2016. (

Moreover, splitting up the company so that the profitable pieces can line a few pockets is wrongheaded. Delivery density and the mix of product lines are the key to Canada Post’s advantage in the parcel market, and its ecological edge too. That’s what gives Canada Post so much potential to innovate and expand services.

And people seem to get it: in 2014, a poll showed that two thirds of the population – Canada Post’s ultimate owners – opposed privatization or deregulation. About 2/3 also supported adding and improving services at Canada Post, including postal banking. Since then, the federal government has known better than to go down the privatization road.

To emphasize just where he’s coming from, Ashworth compares the ‘opportunity’ to the privatization of Hydro One in Ontario – which was so appealing to private investors that we’ve since seen dramatic rate hikes and higher pay for top management with no sign of improved services, a record which threatens to topple the Wynne government. That kind of cost to the public, for the benefit of a few investors, we can do without.

Maybe there are investors who would scoop up parts of Canada Post, risking the dismantling of the cherished public service in the long run. But as everyone apart from Ashworth has made clear, it’s simply not for sale.

Please see more about CUPW’s ideas for innovation and expansion at Canada Post at:
Mike Palecek
National President