Canada Post Corporation

Quick Facts

  • Established: formally in 1867, Converted to Crown Corporation in 1981
  • Owner: Government of Canada
  • Previous Names: Post Office
  • Industry: Package Delivery
  • Website: canadapost.ca

Background

Post offices have existed in Canada since 1755. In 1867, these were all brought under the national governments “Post Office” organization, and it evolved eventually into The Canada Post Corporation, which officially became a crown corporation with the Canada Post Corporation Act of 1981.

Throughout the world, and especially in Europe, Post Office companies are being restructured and prepared for sale by their Government founders. Package delivery is a mature, profitable business which has become very competitive with the advent of global companies such as FedEx and UPS.

The Privatize.CA Conclusion

Unchecked, Postal Services around the world have turned into Government-owned corporate fiefdoms with little accountability, poking gold-plated fingers into mature private sector industries ranging from banking in Japan to telecommunications in Germany. Very few postal services are subsidized, many turn a regular profit.

On both accounts, Canada Post is no exception.

Canada Post has numerous subsidiaries operating in several markets. It runs the largest national competitor in the overnight package delivery sector, Purolator Courier, in addition to its own “less quick” express services branded as Canada Post services and largely delivered through this network. It competes against hundreds of private-sector competitors in domain name registration, e-commerce and other Internet services.

This sort of intrusion into the private sector is abysmal and should be put to a stop.

The German Postal service has lost anti-trust lawsuits brought by large international couriers who correctly claimed that the Government was interfering in this industry. Because Canada has weaker anti-trust laws than Europe, such a lawsuit would likely fail, but the same accusations could be made against Canada Post Corporation.

Germany already got out of telecommunications, Japan has recently announced a serious restructuring of its postal service, which will unravel its banking and insurance divisions, and inevitably lead to the privatization of its postal service. The UK is transforming its service too.

Canada Post needs to sell off its non-core subsidiaries and privatize the postal service itself, ideally in an IPO that would ensure that shares became widely held, much like the shares of Canada’s largest telephone services company, BCE.

Canada Post operates like a private company, buys and sells anything at will, and is not ashamed to get into new industries. If it was a private company, this would be fine. But it is not, so its underlying, unspoken guarantee of bail-out following poor investments distorts its decision making, and the markets in which it competes.