Stamp Out Canada Post

Is There a Market For This Guy?

There is relatively little news coverage of the rotating strikes and lockouts involving Canada Post and the Canadian Union of Postal Workers (CUPW). It appears that because few Canadians care about it the major media provides only cursory reportage. Fatigue over the troubled labour history of the institution probably has much to do with the disinterest. Now might be a good time to wind up the Crown Corporation and make its assets available to the private sector in an orderly liquidation. In other words: stamp out Canada Post.

Sympathy for Postal Workers

Very little sympathy exists for postal workers paid $24 per hour with benefits that include up to 7 weeks annual vacation and the possibility of retirement at age 55. Their pension fund is a defined-benefit plan, one of the most lucrative for workers in Canada. Small wonder there is little sympathy for their current plight; empathy is out of the question.

The issues in the current negotiations are health and safety, pay for new hires and a proposal by Canada Post to eliminate the accumulation of sick leave. On the surface, these would not seem to be burning issues for the existing 48,000 urban workers but mainly a show of power by the union.

Getting Serious About Privatization

Calls for privatization have emerged over the years. Arguments against include pleas for the preservation of an allegedly cherished Canadian tradition coupled with rationalizations about how privatization has not worked so well in other nations. Others aver that Canada’s disparate and remote centers of population preclude a private-sector service. This is balderdash. That kind of decentralization feature is exactly what makes creativity and innovation possible by allowing specific and local knowledge to come into play.

Principled arguments and reasoning would examine the nature of the postal services and who it is that really determines value. Are the various operations profitable? Can they be made profitable in the private sector? Who decides to risk capital, and where does the capital come from? What about the barriers to entry created by a government monopoly of services and a union monopoly on workers? Who values the postal service and how much are they willing to pay for those services?

Competition is a Long-Run Solution

The fact that package delivery competition from FedEx, UPS and others has evolved in the market suggests there is room for competition; competition in all areas would undoubtedly lead to better service and lower prices in the long run. There would exist at least the prospect for service improvement at rates determined by the market.

The continuing long run with Canada Post and the unions offers only more of the same dubious quality of service. A surly elite of pampered workers—whose limited skill requirements and union-determined rates have been nonetheless erected as a roadblock for others—would continue to greet patrons at urban main offices.

“The ‘Seen’ and the ‘Unseen’”

As to what is seen by the union, the postal workers and others disposed to prolonging an institution “uniquely Canadian,” they all neglect—as incompetent economists do—the unseen consequences of maintaining this dinosaur. These would include the penalizing taxes that may go to support the institution, the many entrepreneurs and workers effectively barred from entering the competition or labour market, and the diverted capital from a limited supply in the private sector.

Finally, although the inconvenience of a postal strike is not as noticeable in this age of electronic mail and billings it remains an expensive imposition on the economy. Commercial bulk mailing and international mail and package services are impaired; planning and scheduling are compromised activities in an array of endeavours. Such costly nonsense would disappear completely under privatization without the monopolistic privilege bestowed by government.

©Copyright 2011 Edward Podritske

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