Deregulation of Canada Post would result in higher prices, reduced service or both

The federal government is conducting a review of our public post office called the Canada Post Corporation Strategic Review (CPCSR). The CPCSR is considering deregulation of our universal public postal system. This is the second in a series of five bulletins on good reasons to oppose deregulation of Canada Post.

Deregulation would result in higher prices, reduced service or both.

There appears to be a correlation between countries that have fully deregulated their post offices and higher standard postage rates. See the chart on the back of this bulletin.

Why is this? Once a domestic letter market is fully deregulated, competitors typically focus on profitable urban areas and business mail, leaving unprofitable rural delivery and individual mail to a post office. The post office normally loses part of the lucrative letter business to competitors. At some point, the post office can no longer cross subsidize and finance high cost individual mail and rural delivery with the money it makes from large volume urban mailings because competitors have taken this business.

In addition to rate hikes, the public would likely face service cuts if Canada Post is deregulated. If our post office follows the example of Sweden’s deregulated post office, it would cut back or eliminate retail service, especially in rural areas.

Recently, 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.”

 

What can you do to oppose deregulation?

Sign a Hey Harper – Hands off my post office postcard. Your local is distributing the postcards. Ask for one.

 

Standard or First Class Letter Rates in 11 Countries

	2008 Domestic Rate	Currency	20 g rate in CAD$	Fully Liberalized Domestic Market?
Finland	0.70	eur	$1.08	Yes
Italy	0.60	eur	$0.94	No
Sweden	5.50	sek	$0.92	Yes
Austria	0.55	eur	$0.86	No
France	0.55	eur	$ 0.86	No
Germany	0.55	eur	$ 0.86	Yes
New Zealand	0.50	nzd	$0.39	Yes
Japan	80.0	yen	$0.77	No
United Kingdom	0.36	gbp	$ 0.71	Yes
Canada	0.52	cad	$0.52	No
United States*	0.42	usd	$0.42	No

Sources: Universal Currency Converter, 5/25/08; Postage rates worldwide,

 http://www.atms.ch/rates; United Nations: World Population Prospects 2006