‘They squandered 10 years of opportunity’
Canada Post strike exposes longtime problems, expert says
Canada Post is at “death’s door” and won’t survive if it doesn’t dramatically transform its business, a professor who has studied the Crown corporation is warning as the postal workers’ national strike drags on.
“Canada Post is losing money now. Canada Post is going to lose more money next year and even more money the following year. And what they don’t understand is they are on the edge of going out of business,” Ian Lee, associate professor at Carleton University’s Sprott School of Business, said in a video interview with CTVNews.ca on Monday.
Canada Post has no choice but to transform into a parcel post courier service, Lee said, noting he’s on board with the Crown corporation’s recently announced proposal to deliver parcels seven days a week.
While rural residents and small businesses rely more on Canada Post, most Canadians live in cities and use electronic means to communicate rather than written letters, Lee said. As well, a growing number of businesses are going digital, he added.
Canada Post CEO Doug Ettinger(opens in a new tab) suggested during the Crown corporation’s annual general meeting in August that the current operation isn’t sustainable. Over nearly two decades, it went from delivering 5.5 billion letters a year to about two billion today, Ettinger said.
Amid Canada Post’s mounting financial struggles and concerns about its future, a postal strike has shut down services nationwide since Friday as negotiations continue between the Crown corporation and the Canadian Union of Postal Workers (CUPW) for new collective agreements.
Lee, who wrote a 2015 report about the Crown corporation, said mail volumes have declined dramatically amid the digitization of the economy.
In his report for the non-partisan think tank Macdonald-Laurier Institute, he argued that Canada Post would need to pivot from its core business of letter mail and become a parcel post service that teams up with e-commerce in order to survive.
He made that recommendation to the government and Canada Post, he said, but they rejected his advice.
“They said, ‘no, no, no, everything’s fine, everything’s fine. We’re going to be OK with letter mail,'” he said, noting the digitization of society has only accelerated since then. “So the letter mail continued to decline. And now Canada Post finally realizes that they are facing death’s door.”
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