OPINION: Shakedown attempt by Canada Post underscores need for privatization
For the second time in just six months, the Canadian Union of Postal Workers (CUPW) is threatening strike action. As Canadians know all too well, postal strikes can be highly disruptive, given that the federal government provides Canada Post with a near-monopoly on letter mail across the country. CUPW is well aware of this and uses that to its advantage in negotiations. While CUPW has the right to ask for whatever it wants, Canadians should finally be freed from this albatross. In January, the Trudeau government loaned Canada Post a whopping $1.034 billion to help “maintain its solvency and continue operating.” Since 2018, Canada Post has lost more than $4.6 billion and according to its latest financial update, it lost more than $100 million in the first quarter of 2025 alone. Canadians are on the hook for these losses because the federal government owns Canada Post. Salaries and other employee costs comprise more than 6% of Canada Post’s expenses and CUPW and Canada Post management both know they can simply pass any losses on to Canadians. Consequently, there’s less incentive for management to control the bottom line or make reasonable budget requests when negotiating with the government. But, if the government privatizes Canada Post, it will impose a proper constraint on costs that doesn’t currently exist. This is only fair given there’s no compelling reason why Canadians should underwrite the inflation of salaries in a money-losing Crown corporation. Of course, government ownership of Canada Post is archaic. When the organization was founded more than 250 years ago, the world was quite different. In today’s age of Amazon, a plethora of delivery services exist coast-to-coast that serve Canadian consumers. Other countries, including the Netherlands, Austria and Germany, long ago privatized their postal services. The result was increased competition, which in turn reduced prices and improved quality. Alongside privatization, the federal government should also eliminate Canada Post’s near-monopoly status on letter mail. This policy is purportedly meant to ensure universal service. But, in reality, it prohibits other potential service providers from entering the letter-delivery market (including in remote areas that may experience less Canada Post service post-privatization), deprives Canadians of choice and, crucially, reduces the incentive for Canada Post to improve its service. Simply put, the federal government should focus on its core responsibilities and delivering mail is clearly not one of them. Given Canada Post’s latest attempted shakedown of Canadians, it’s never been clearer that it’s time for Canada Post to go the way of Air Canada, de Havilland and CN Rail. Once upon a time, the federal government owned all three of these entities, until it became clear there was no reason for the government to own an airline, build planes or deliver goods by train. Why is letter mail any different? Canadians deserve better. Alex Whalen and Jake Fuss are research directors at the Fraser Institute
