Deregulation of Canada Post won’t work for people and postal workers

The government’s strategic review of Canada Post is considering deregulation of our universal public postal service.

Only a very few countries have fully deregulated their post offices by removing the exclusive privilege or monopoly on letters: Sweden, New Zealand, Finland, the United Kingdom and Germany.

In general, full-scale deregulation has led to post office closures, fewer jobs, less service and higher postal rates for people and small businesses. Here are a few highlights:

United Kingdom: The UK, which fully deregulated its post office in 2006, is in the midst of massive upheaval. Operating profits are plummeting. The government is in the process of implementing a restructuring plan that includes closing 2,500 post offices. Additional service cuts are expected. British postal workers have been on strike on numerous occasions in an attempt to maintain their rights. Earlier this year, an independent review of the United Kingdom’s deregulated postal sector found that “there have been no significant benefits from liberalisation for smaller businesses and domestic consumers.”

Sweden: Between 1993 and 2005 Sweden Post eliminated more than 16,000 jobs. The proportion of full time jobs at Sweden Post declined.  There was a noticeable increase in part time jobs. The Sweden Post rate for a domestic overnight letter increased by ninety per cent, far outstripping the accumulated inflation rate of 14 per cent (Note: a third of this increase was due to the imposition of a value-added tax on postal services).

New Zealand: Postal workers in New Zealand have seen their wages lag behind other workers. Between 1997 and 2005 the wages of postal workers increased by 18.9%. During the same period the average wage in New Zealand rose by 28.3%.

Germany: Media reports indicate that Deutsche Post wants to get rid of the 750 remaining post offices it operates by 2011, noting that the offices could be taken over by private operators.

Proponents of postal deregulation are now scrambling to explain why deregulation has not worked. They are saying that it will take time for people to see the benefits. They are also claiming that some countries just didn’t deregulate properly. They are making excuses.

There is no real evidence, to date, that deregulation actually works.  But there is a great deal of evidence which indicates that deregulation will not be good for people in general and postal workers in particular.