Privatizing Canada Post would improve 'anachronistic' mail carrier: Knowledge Driven Revolution

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Privatizing Canada Post and eliminating its monopoly on letter mail would improve mail delivery in Canada, a new study suggests.

Canada Post is "anachronistic, and incapable of responding to the worldwide changes that are transforming the postal sector," says the report released Monday by the C.D. Howe Institute.

"Change is going on in the world around us, whatever Canada Post does," said director of research Finn Poschmann.

"The question is: Why preserve Canada Post as the way it is and why is the government of Canada in the business of maintaining a mail monopoly?"

The authors of the study recommend a measured transition to privatization, with the government gradually introducing competitive deregulation.

A spokeswoman for Transport Canada said the government has no plans to privatize Canada Post.

John Caines, a spokesman for Canada Post, said the Crown corporation has been profitable for the past 11 years, and was a leader in launching online bill payment technology.

"Our service is good now," Caines said. "We're performing our letter mail at about 96 to 97 per cent on time. ... We think we're providing a good service. If privatization would improve on that, who knows?"

The study suggests mail delivery in Canada could be more efficient if Canada Post had competition.

"Productive efficiency becomes a matter of a competitive firm's survival, as does constant attention to dynamic efficiency in adopting new products and processes," the study says.

"Monopolists do not face the threat of failure from higher costs or obsolete technology."

In 2000, the Canadian branch of UPS sued the federal government for about $230 million, claiming Ottawa has failed to regulate Canada Post, thus giving it an unfair advantage over private competitors.

UPS alleges the Crown corporation uses its retail outlets, collection boxes and sorting facilities to give unfair market advantages to its courier services.

The decision is in the hands of a tribunal.

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Privatizing Canada Post would improve 'anachronistic' mail carrier: Study