The Canada Post Corporation Strategic Review (CPCSR) Advisory Panel issued a comprehensive report that examines virtually all aspects of Canada’s postal service. It contains both positive and negative recommendations. Unfortunately much of the media coverage has been incorrect. Here is a summary of all of the recommendations.

All CPCSR recommendations are available at

http://www.cpcstrategicreview-examenstrategiquescp.gc.ca/
FinalReport/rpt-eng.pdf

Deregulation denied

The Advisory Panel recommends that Canada Post maintain the exclusive privilege to deliver letters.

Universal Service Obligation

The report recommends the adoption of a detailed Universal Service Obligation (USO) which would be issued as a “Service Charter”. The Service Charter would be updated regularly (at least every five years) and would include standards concerning delivery, retail services, pricing and the reserved area to be covered by the exclusive privilege. The costs of the USO would be identified and covered primarily through services covered by the exclusive privilege.

Delivery modes including door to door delivery

The report recommends the CPC Annual Report contain an analysis of the cost and environmental impact of each different type of delivery mode including CMBs, door to door, centralized delivery etc.

Rural Delivery Safety

The report recommends rural mailbox delivery be reconsidered in light of safety concerns.

International Mail

The report supports the removal of outbound international mail from the exclusive privilege.

Modernization Plan

The Advisory Panel supports Canada Post’s $3 Billion modernization program. CPC should provide a detailed plan to the government. CPC should be permitted to borrow up to $1.7 Billion to finance the implementation of the program.

Environment

Benchmarks should be established to ensure that CPC’s modernization program reduces its carbon footprint.

Third Party Review of Collective Agreements

The Advisory Panel recommends that an independent third party work with Canada Post and its unions to review existing collective agreements to identify whether any parts will inhibit the modernization plan or impede productivity improvements necessary to ensure CPC’s financial self-sustainability.

Public Policy Objectives

The report recommends that Canada Post should not be required to subsidize services designed to meet public policy objectives, such as the library book rate, government free mail, the food mail program and the publications assistance program. If the government wants these services to be offered free, or at a discount rate, it should provide the funding. It also recommended that libraries be entitled to the volume discounts accorded other large volume mailers.

Competitive Services

The report recommends CPC be allowed to continue to provide competitive services such as admail and courier services. Also the Corporation should leverage its networks and develop new revenue streams related to its core business.

Employee Share Ownership Plan

The report recommends that the government allow CPC to introduce an employee share ownership program.

Rural Postal Services

The report recommends rural postal service be included in the USO. Detailed obligations for minimum services, locations, access and service levels and the process to govern closings should be included in the Service Charter. It also recommends that rural should be redefined as communities with a population of 10,000 or less. Concerning the moratorium the Advisory Panel recommends CPC be allowed to use private sector franchises in rural Canada. CPC should consult with rural communities to review and identify alternative modes of delivery and access to services.

Postage Rates and Dividends

The report recommends a new price cap which would reflect CPC's overall costs including labour and transportation. At minimum the price cap should be no less than inflation. A significant one-time increase may be necessary. There should be a relaxation of the requirement to pay dividends during the modernization program.

Postal Councils

The report recommends that Canada Post maintain the National Advisory Council and create a major postal users council, a rural postal user council and a small and medium sized enterprise council.

Productivity

The report recommends that CPC intensify its efforts to improve productivity and report the results.

Financial Framework

The report recommends the 1998 Policy and Financial Framework be adjusted to reflect the costs of the USO and Service Charter and the impact of the modernization program.

No Regulatory Agency

The report recommends the mechanism of a price cap instead of the establishment of a regulatory agency. The Advisory Panel recommends that forecasts of rate increases be included in the Five Year plan and publicized.

Pension Obligations

The report recommends that the government and CPC ensure that funding obligations for the pension solvency deficit do not impede the modernization program.

Partnerships

The report recommends CPC partners with other firms and/or competitors.

Governance

The Advisory Panel strongly believes the oversight of the corporation should rest primarily with the Board of Directors. The report recommends specific roles for the Board of Directors and describes the division of responsibilities between the government and the Board of Directors. The CEO should not be on the Board of Directors.

Postal Services Working Group and University Chair

The report recommends the establishment of a Postal Services Working Group comprised of senior representatives from various government departments and agencies. It also recommended the creation of a university chair in postal studies.

Regular Canada Post Strategic Reviews

The report recommends conducting a Strategic review of Canada Post every five years.

Government Oversight

The report recommends that the Board of Directors deal directly with the Minister of Finance on financial matters and with a Minister of a program department (currently Minister of Transport) on regulatory or social matters.