Closures and service interruptions

Deepak Chopra
President & Chief Executive Officer
Canada Post

In less than a decade, digital communication has eaten away at the core business of Canada Post, putting at risk a corporation that had survived 250 years of dramatic change. By 2012, we delivered one billion fewer pieces of mail than we did just six years earlier. Cost reductions across our operations in recent years have helped, but fundamental changes were required to avoid large financial losses. With that, and the changing postal needs of Canadians, we announced what is viewed as one of the boldest postal initiatives ever undertaken: Canada Post would be the first post office in the world to phase out door-to-door mail delivery. Even with compelling reasons supporting the move, it was not a decision taken lightly.

It’s the highest profile of the five initiatives contained in our plan to secure the future of Canada’s postal service. It’s the result of two years of analyzing all options, including those at post offices around the world, to determine what would work best for Canadians from coast-to-coast.

Since the announcement, some have come forward with other potential solutions, which at first glance may seem plausible, but unfortunately don’t hold up to scrutiny.

One of those is postal banking, which Canada Post looked at years ago. We found the conditions underlying the success of postal banks in other countries—such as a strong history of postal banking, or providing a more secure option than traditional banks—aren’t present in Canada. Would Canadians take their money out of their secure, well-established financial institution and hand it over to a bank started from scratch by Canada Post? That’s an expensive side bet when your core business is losing money.

Beyond banking, some raise the fact that other post offices have pursued privatization. That’s not within our mandate, but it’s important to note that it has required the transferring of billions of dollars of their pension obligations, or other significant costs, to the public purse. Canadians have told us clearly that we have to do what’s necessary to avoid becoming a drain on taxpayers, and that’s our goal.

Canada is a vast and beautiful country with one of the lowest population densities in the industrial world. Serving 15 million addresses in every corner of the country is what we’re good at, but it means Canada Post has one of the highest cost structures of Western post offices. It’s also getting higher as the number of addresses continues to rise, while mail items per household fall.

Our challenges are unique. Canada Post cannot simply import a solution and expect it to work for us. That would be a huge mistake, especially when we already have an option where Canada is a world leader, with 30 years of experience to draw upon.

Community mailboxes first appeared in Canada in the 1980s and have stood the test of time for millions of Canadian households. Those who have them understand there are real advantages: they provide more security than an unlocked mailbox, include secure parcel lockers and ensure mail doesn’t pile up at your door if you aren’t home. They aren’t as close to the door, but they are close to the home. That’s also true for those who get delivery to an apartment lobby box or a rural mailbox, meaning 10 million households will see no change as part of our plan.

The reality is delivering mail to the door costs twice as much as delivering to a community mailbox. While the savings are significant for converting the remaining five million households, it’s about more than that. It will allow us to continue delivering mail every day, which businesses and many people still rely on. No post office in the industrialized world has successfully reduced the number of days of delivery for that very reason. As well, Canada Post can generate additional revenue when converted customers see the convenience of a parcel locker near their home and shop more online.

These are the services that Canada Post is protecting, and that community mailboxes and the other elements of our plan will help keep viable. The structural challenges we face are not insurmountable, they just need the right solutions—ones that are tried, tested and built for Canada.