national
farmers union
February 15,1996
The National Farmers Union appreciates this opportunity to present our views on the future of Canada Post. As the only national direct-membership farm organization, the NFU has a significant interest in the future of Canada Post, and specifically its provision of service to rural and remote residents.
The provision of postal services to rural areas is absolutely vital to the viability of many rural communities. The National Farmers Union feels that access to the postal system should be deemed a right, and not a privilege.
The National Farmers Union has concerns about the framework of the review. We note that the basis for this review is a so-called competitive environment. Those of us in rural Canada are not in a position to view the 'benefits' of a competitive environment.
The stated purpose of the Review is to:
Instead, the National Farmers Union suggests that the review should conduct an analysis in light of the reduced service experienced by many Canadians. Competition is relevant to only the few who live in profitable areas.
Courier competition has brought few benefits to rural and remote areas. Currently, many rural residents cannot get home delivery of courier packages, and there is no local location for parcel pick-up. As of 1989, there were many regions that did not have access to courier service, other than that provided by Canada Post. Even large centres such as Grande Prairie, Alberta, did not have full courier service. Canada Post is the only provider of courier services which can be accessed by all Canadians.
As well, rural Canadians have experienced the drawbacks of competition. A competitive environment has led to communities losing their post offices and other service reductions. Prior to the 1986 privatization plan, there were 5221 rural post offices (1). Minister Dingwall noted in his speech announcing the moratorium, that "since 1987, close to 1500 have been closed or converted... In Ontario 391 were closed. In Saskatchewan, 214."
The National Farmers Union recommends that Canada continue its moratorium on post office closures.
The National Farmers Union recommends that Canada Post refrain from further discriminating against rural communities in the quality of postal services through the practice of franchising and/or contracting such services.
Rural Canada is a captive market. Rural Canadians are dependent upon Canada post for their communications. Far more than urban dwellers, rural residents do their business and personal transactions by mail. We must use the post office, and usually do not have the option of choosing the post office we use. Therefore, rural residents do not have the 'market power' of those in a large community with high population density. This is of particular concern when we note that the review is discussing ending Canada Posts' monopoly on letterclass mail.
The option of a separate subsidy of rural and remote postal delivery in unacceptable. Rural residents have too often seen that the move to direct subsidization will lead to the loss of that subsidy. We only need to look at the move from the Crow rate to the Crow benefit to see that a subsidy for those in remote areas, nominally to exist in perpetuity, can easily be ended.
The National Farmers Union recommends that Canada Post retain its monopoly on first class mail delivery, and that postage prices continue to be standard across the country.
The current mandate of Canada Post Corporation was determined in 1981 after two years of consultations. In 1981, Andre Ouellet, the Postmaster General, noted
"In creating this Canada Post Corporation, we have tried to add something of the utmost importance in clause 5, section 2 which says, I quote: 5(2) While maintaining basic customary postal service the corporation shall have regard to: ... And this sentence, Mr. Speaker, is essential ... We want to write down this guarantee in the act so that Canadians, particularly in remote areas of the country and rural sectors which are often affected by decisions made by large Canadian corporations, would not be penalized by the creation of a Canada Post Corporation..."
"...Just as the Post Office Department, the Canada Post Corporation will have the monopoly to transport letters, so as to have a guaranteed source of revenue allowing it to ensure the universality of services." (our emphasis)
These are two key points of the 1981 legislation that the National Farmers Union would like to see retained and strengthened in any review.
Canada Post's mandate was passed by the House unanimously in 1981 and although not ideal, it includes many aspects which are positive for rural and remote Canadians.
The Canada Post Corporation Act instructs the Corporation to maintain basic customary postal service. It also instructs Canada Post to look at:
The National Farmers Union states in its policy that "The provision of postal services to rural areas is absolutely vital to the viability of many rural communities. We oppose Canada Post's vast reduction of postal services across Canada, and particularly to rural areas, in efforts to record a profit. The provision of postal services must be regarded as a right and not a privilege."
Communities already affected by reductions must have postal services restored and improved to previous levels in circumstances where they are dissatisfied with privatization. We urge no further privatization occur without the concurrence of the communities affected.
In 1993, legislation was passed allowing 10% of Canada Post to be sold to employees through a share offering. This has not yet happened, because Canada Post is waiting for shares to be more profitable. From corporate projections, this should happen in 1998.
This move toward privatization will put pressure on profit performance, and away from attention to service.
The National Farmers Union recommends that no part of the Canada Post Corporation be privatized.
These recommendations are not without precedence. In 1989, a report by the Postal Services Review Committee urged the Corporation to improve rural service and extend door-to-door delivery. It recommended that Canada Post not go ahead with most of its plans to deregulate products and services.
In 1989 a parliamentary committee held a review of Canada Post. The Parliamentary Report recommended that Canada Post's exclusive privilege for first-class mail be maintained, the Liberal minority report supported this recommendation.
The Liberals issued a minority report which supported the above recommendation. As well, the minority report recommended that:
The National Farmers Union supports these recommendations.
Conclusion
Hon. David Dingwall, Minister Responsible for the Canada Post Corporation noted on February 17, 1994 that "I can assure Canadians that Canada Post will be doing what it was designed to do - provide an essential and viable public service. And that means just that: serve the public." As not all Canadians will see the 'benefits' of competition, we encourage the Review Committee to support this statement by the former Minister, and ensure that service to all Canadians is maintained and improved.
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