Submission of the Canadian Union of Postal Workers to the Canada Post Corporation Strategic Review

Share This

Tuesday September 2 2008

Executive Summary

CUPW’s Submission to the Canada Post Strategic Review

We believe the CUPW represents over 55,000 rural and urban operational postal workers. Our members work in over 2,000 communities in every region of the country. We are very proud of the role we have played in fighting to protect and improve public postal services in Canada and we are determined to continue this tradition.

At the outset, the union wishes to state our belief that public sector organizations, such as Canada Post Corporation (CPC), should, at all times, strive to be model institutions in our society. They should exhibit the highest standards of social responsibility in all of their relationships with the public, employees, customers and competitors.

As a large national institution, with a physical presence in almost every community, it is essential that CPC set the highest standards in all of its endeavours. With regards to the environment CPC should ensure that its plant facilities, retail services and delivery operations are the most environmentally responsible in the industry. In its commercial undertakings CPC should implement the highest ethical standards in its dealings with both its customers and its competitors. CPC should constantly seek new ways of involving public participation in its decisions concerning the public services it provides in the communities. As an employer CPC should respect the dignity of its workforce and aim to have the best record concerning the health and safety of employees. In its international dealings, and especially when it engages in joint ventures with partners in other countries, CPC should require all of its business partners provide wages and labour standards which are superior to the minimum standards established in conventions of the International Labour Organization (ILO).

Public policy issues concerning Canada Post should be guided by the following principles:

  • CPC must use its advantages of national coverage and economies of scale to provide accessible and affordable services to all Canadians.
  • The obligation to service all communities must be balanced by an exclusive privilege to deliver letters.
  • Postal services must encourage economic development in rural areas.
  • Canada Post must operate in a manner that promotes the environment.
  • Postage rates should be set at a level necessary to cover all costs of operations and investment. Any surplus should be reinvested into expanding services to the public.
  • Canada Post should be owned collectively by the people of Canada and accountable to Parliament.

Today CPC can be considered as a public sector success story. It is rated as the most trusted public institution in Canada. It has experienced over a decade of profitability while raising prices at a rate considerably less than the overall rate of inflation. Internationally, CPC is rated among the most successful postal services in the world. During the past thirteen years, CPC has not only been financially self sustaining as required by the CPC Act, it has also paid the federal government $623 million in dividends and $496 million in taxes.

As seen from the following table CPC ranks among the most successful post offices from an international perspective.

20 g First-Class Rates for Industrialized Countries in Currency and Labour Time

 

2008 domestic rate

Currency

Foreign unit in US$

20 gram rate in US$

Density
(pop per
km²)

Production workers: hourly wages in US$: 2006

Production workers: minutes labour to purchase 20 gram letter

Fully liberalised domestic market?

Finland

0.70

eur

1.58584

$1.11

16

$ 29.90

2.23

Yes

Italy

0.60

eur

1.58584

$0.95

195

$28.71

1.93

No

Sweden

5.50

sek

0.16989

$0.93

20

$31.80

1.75

Yes

Austria

0.55

eur

1.58584

$0.87

99

$30.46

1.71

No

France

0.55

eur

1.58584

$ 0.87

111

$24.90

2.10

No

Germany

0.55

eur

1.58584

$ 0.87

232

$34.31

1.52

Yes

New Zealand

0.50

nzd

0.79224

$0.40

15

$14.47

1.66

Yes

Japan

80.0

yen

0.00965

$0.77

338

$20.20

2.29

No

United
Kingdom

0.36

gbp

1.99131

$ 0.72

248

$27.10

1.60

Yes

Canada

0.52

cad

0.99481

$0.52

3

$25.74

1.21

No

United States

0.42

usd

1.00000

$0.42

31

$23.82

1.06

No

Foreign exchange rates of 5/12/08
Source: Rates: International Affairs Department: USPS
Density: United Nations: World Population Prospects 2006

 

CPC and the exclusive privilege

The exclusive privilege was included in the CPC Act to ensure that competitors cannot reduce CPC revenues by undercutting the corporation in the lettermail service in the lucrative large city markets.

CUPW believes there are many reasons to maintain the exclusive privilege as it is.

  1. Previous independent reviews have acknowledged the importance of the exclusive privilege and recommended its preservation.
  2. The public and small businesses support the exclusive privilege and most large volume mailers support the status quo.
  3. The exclusive privilege is necessary to maintain uniform postage rates.
  4. Postage rates for the public and small businesses would increase without the exclusive privilege.
  5. Elimination of the exclusive privilege would lead to cutbacks in service to the public especially in rural and remote locations.
  6. By increasing delivery density the exclusive privilege promotes efficiency and lower costs.
  7. The exclusive privilege is good for the environment.
  8. The exclusive privilege promotes security of the mail.
  9. The exclusive privilege supports decent jobs.
  10. Deregulation has not worked where it has been tried.

The exclusive privilege for letters has allowed CPC to obtain greater efficiencies of scale in processing and a sufficient delivery density to permit CPC to offer low prices while also maintaining profitability. CUPW proposes that the exclusive privilege in letters should be maintained and also be extended to the nation’s parcel delivery industry.

 

Financial Issues

Concerning the criteria for a price cap the union believes that the all items Consumer Price Index (CPI) is not an appropriate instrument to use as it does not reflect CPC’s actual input costs. CPC should be able to fully cover all input costs such as fuel, facilities, labour etc. The price cap should be constructed to reflect the relative importance of these inputs and ensure CPC is fully protected from external events over which it has no control. The only exception to the new price cap we are proposing would be for qualified non-profit organisations.

In line with the recommendations of the 1996 Mandate Review we oppose any requirement for CPC to pay dividends to the federal government. We recommend that some of the funds currently being paid in dividends should be redirected to partially subsidize the mailing costs of Canadian publications.

 

Services to the Public

The Union supports the continuation of services such as materials for the use of the blind, government free mail, the publications assistance program (PAP), the food program and the library book rate.

CPC’s retail operations are an integral part of the services provided to the population. We recommend the moratorium on rural closures should continue and be expanded to include urban offices. The hours and range of services offered at rural post offices should be expanded to include banking, insurance, financial services and other government services where these are not currently available in the community. CPC should also conduct an audit of all postal services offered to aboriginal peoples and consult with aboriginal organisations and the postal unions to improve service offerings and properly utilize CPC facilities on reserves.

Concerning delivery services we propose that door-to-door letter carrier delivery service be included in the universal service obligation. Elderly and disabled residents should be offered door-to-door letter carrier delivery immediately and further expansion should occur as finances permit. CPC should also cease converting rural mailbox delivery to community mailboxes or other forms of delivery until an inclusive consultative process involving residents and union representatives is established.

 

Environment

The government should sponsor a thorough examination of the overall environmental impact of postal services. CPC should conduct an environmental audit to identify measures that can be taken to reduce its carbon footprint.