On August 8, 2013 the C.D. Howe Institute released an E-brief (report) entitled “How Can Ottawa Deliver A Reformed Canada Post” prepared by Benjamin Dachis which received widespread news coverage by the monopoly media in Canada.
The C.D. Howe Institute is a monopoly oriented think tank and Benjamin Dachis is a Senior Policy Analyst at the Institute. Dachis is also a founding member of the Reason Foundation, a right wing think tank supporting the free market economy and the privatization of public services. The Reason Foundation publishes an Annual Privatization Report on privatization news, developments and trends.
In essence, the E-brief of the C.D. Howe Institute furthers on the Conference Board of Canada report “The Future of Postal Service in Canada” authored by David Steward-Patterson released last April, a report which was commissioned by Canada Post Corporation. Deepak Chopra, CEO of CPC is also a member of the Board of Directors of the Conference Board.
The report by the C.D. Howe Institute calls upon the government to begin contracting out mail delivery routes and pick-up services while slowly privatizing the post office and in this way, begin to open up the most lucrative sectors of mail processing and delivering activities to private interests.
What is most astonishing with this report is that its author is presented as an expert opinion on questions of governance and public institutions while he contributes nothing enlightening on the future of Canada Post. He merely repeats the speculations made by the Conference Board of Canada earlier this year and tries to establish those speculations as facts.
The monopoly news media in covering the release of the report did the same thing and through the repetition of those very same speculations, attempted to create a “well-founded” concern amongst the workers and the Canadian people as to the financial viability of the post office.
I strongly encourage everyone to familiarise themselves with these two reports. The C.D. Howe Institute E-brief is a 7-page report which can be read online at www.cdhowe.org. The report by the Conference Board of Canada released in April 2013 is a much longer report and can be accessed by visiting their website.
For your information, we have also dealt with the Conference Board of Canada Report in a previous Sunday e-mail dated May 5, 2013. For a copy of that Sunday e-mail, just send me a note a firstname.lastname@example.org
*This week, the Sunday e-mail features an article written by Louis Lang, former Ottawa local union president and post office retiree which provides an analysis of the C.D. Howe Institute E-brief by Benjamin Dachis.
C.D. HOWE INSTITUTE ATTACKS POSTAL WORKERS AND THE PUBLIC POST OFFICE.
A report issued by the C.D. Howe Institute on August 8, 2013 calls for the further privatization of Canada Post. The report claims that due to a forecast of drastically declining mail volumes for the foreseeable future, the increasing cost of door-to-door and rural delivery, the high solvency deficit of the Defined Benefit Pension Plan and high “labour costs,” Canada Post must “further contract out some postal services, gradually reducing the scope of the government monopoly, while avoiding large-scale layoffs of Canada Post employees. The government should also consider direct subsidization of services in remote areas, rather than cross-subsidizing them via revenues generated from urban consumers.”
This report is reminiscent of a report in April 2013, issued by The Conference Board of Canada, financed by Canada Post, which also made dire predictions about the financial viability of the Post Office.
Both reports are part of a concerted attack on postal workers and the public post office by monopoly corporations who want to appropriate the most profitable sectors of postal services for themselves. The attacks are being led by Pitney Bowes in the U.S., one of the largest corporations in the world directly involved in postal services. Earlier this year, Pitney Bowes financed a report by a right-wing think tank in the U.S., which proposed creating a “public-private hybrid” postal system. Under the proposal, two-thirds of the U.S. Postal Service (USPS) — the retail and processing component would be privatized, while the delivery network would be handled by the USPS.
While the various reports may differ in some ways, the mantra that is repeated is always the same; “Rapidly declining mail volumes and a range of financial and other operating factors have placed the postal service under significant financial pressure that threatens its continued viability.” All the reports mentioned above also have another characteristic in common. They do not contain any accurate facts or statistics to support any of their absurd claims.
For instance in the case of the USPS, the most recent financial report for USPS clearly shows that mail volumes are steady and the greatest financial pressure on postal service is the reckless drive of the corporations and their politicians to greater privatization. This has led to the elimination of tens of thousands of jobs, selling off retail outlets, closing and consolidating processing plants, contracting out more of the work normally done by postal workers and the elimination of more and more services like Saturday delivery in the U.S.
The reports of the Conference Board of Canada and the C.D. Howe Institute are no different. The C.D. Howe report states that domestic mail is forecast to decline by 27 per cent from 2012 to 2020. No supporting statistics are provided to support this claim. In fact if we review the past ten years based on Canada Post’s Yearly Financial reports we find the following. In 2003, CPC processed 10.7 billion pieces of mail and had revenue of $6.3 billion. In 2012 CPC processed 10.1 billion pieces of mail and had revenues of $7.5 billion. While there was a small decline in transaction mail (bills, invoices and statements) there was an increase in other types of mail.
The fact that after cutting thousands of positions and closing retail Postal Stations and mail processing plants the overall revenues have remained the same shows the extent to which the exploitation of postal workers has intensified with Postal Transformation. Clearly the Annual Financial Reports do not support the exaggerated predictions of the C.D. Howe Report.
The other issue which the report claims puts added financial pressure on the corporation is the high cost of door-to-door delivery. What the report fails to mention is that all new addresses added each year do not receive door-to-door delivery. Even if the new address is located inside an existing letter carrier route it receives community mail box service which is the least expensive form of delivery.
The report claims that the solvency deficit of the pension plan grew by 26 per cent in 2012 and now stands at $5.9 billion, which puts financial pressure on the corporation. What the report fails to explain is that the reason for the serious crisis in the Defined Benefit Pension Plan is that the corporation failed to fulfill its obligations to the pension plan.
The following is a quote from Canada Post’s 2012 Annual report: “In the short term, Canada Post plans to continue using the legislation that allows Crown corporations to better manage their funding obligations, and will again seek approval of pension relief in 2013 to reduce its special solvency payments. However, given that under current legislation relief is capped at 15% of plan assets, we expect to reach the relief limit in early 2014.”
In fact the corporation was able to use legislative amendments to the Act to avoid making their required contribution to the pension fund. Therefore, by the end of 2013, the actions of Canada Post in refusing to make their required contribution will cause an added shortfall in the plan of $2.4 billion. An important example is the way the corporation is avoiding its responsibilities for the past year. According to the Annual Report, in 2012, Canada Post recorded an actuarial loss of $780 million but they intend to use the legislative loophole to make a special contribution of $28 million which will add to the problems facing the Pension Plan.
To further shift the burden of the crisis which they have created in the pension plan onto the backs of the workers, the corporation has recently used Harper’s infamous omnibus budget bill (C-45) to unilaterally increase the workers’ share of current service costs from 40 to 50 per cent. The CUPW has vowed to fight this unjust measure.
The most important point about these kinds of reports is that postal workers and all Canadians must reject this perverse logic that if there is a reduction in mail volumes or the pension plan is underfunded or any other fairy tale invented by the monopoly corporations and the government, the solution is to attack the security and livelihood of postal workers and even workers who have retired. These are not solutions but excuses invented to make the workers pay for the irrational and reckless actions of the Board of Directors of Canada Post and the Harper Government.
The right to security and livelihood at acceptable standards are not gifts from the corporation. These rights are ours because of the service we provide through our labour and because we fought under most difficult conditions to defend them.
The reports from the C.D. Howe Institute and the Conference Board of Canada are a clear indication that the very idea of a public post office to serve the needs of Canadians has been thrown into the garbage by the Harper government and the corporations it represents. It is the postal workers who are defending the public post office and their rights, while the Harper Government and those appointed to manage Canada Post has become its wrecker. (Louis Lang)
*For your information, the following is a press release by the Canadian Union of Postal Workers dealing with the C.D. Howe Institute E-brief.
C.D. HOWE INSTITUTE IGNORES THE NEEDS OF CANADA POST USERS.
August 9, 2013
OTTAWA –The Canadian Union of Postal Workers is dismayed the C.D. Howe Institute’s e‑brief on postal reform offers only tired ideas for Canada Post that would result in service cutbacks.
Denis Lemelin, CUPW National President asks, “Why doesn’t it occur to this prominent private-sector-oriented think-tank that Canada Post should raise new revenue? Other postal administrations are bringing in expanded services, and staying viable by doing so. Why is the C.D. Howe Institute so short on innovation?”
Postal services globally are facing the same challenges. Postal operators in France, Italy, New Zealand and Brazil have responded by expanding into banking and financial services. PostFinance, Swiss Post’s postal banking and financial services arm, actually generated 71% of the company’s operating results in 2012.
The e-brief, “How Ottawa Can Deliver A Reformed Canada Post,” released August 8 by the C.D. Howe Institute, advocates an approach that likely leads to service cuts and government subsidization. It recommends contracting out, privatization, and tampering with the universal service obligation (USO) that ensures lettermail delivery to and from anywhere in the country for a single price.
“The C.D. Howe institute was making the same case for deregulation and privatization in 2007, while Canada Post was making profits” says Gayle Bossenberry, CUPW 1st National Vice‑President. “These are tired old ideas, not viable solutions for a valuable public service.
Furthermore, the public is clearly against this approach. Recent Strategic Communications poll results (May 2013) show that 71% of the general population opposes deregulating or privatizing postal services, even more so (88%) if it would mean the end of one-price-goes-anywhere service for the cost of a stamp. The C.D. Howe report does not value universal postal service, but the customers – the owners of Canada Post – clearly do.
*The following is Canada Post official response to the report.
CANADA POST RESPONDS TO C.D. HOWE INSTITUTE’S REPORT
OTTAWA, Aug. 8, 2013 /CNW/ – Canada Post is currently conducting an important national discussion with Canadians on the future of postal service in Canada. With the relentless decline in Lettermail resulting in ongoing financial losses at the Corporation, fundamental changes are needed to transform the business. The C.D. Howe Institute report, “How Ottawa Can Deliver a Reformed Canada Post,” provides further reflection on these challenges and the growing need for change.
With the Corporation at an important turning point in its long history, we are seeking all views and opinions on how to best serve Canadians in the future. To date, 36 roundtable sessions have been held in cities and towns across the country with community, business and charity leaders. Each session has resulted in a healthy discussion about what is needed from Canada Post and what needs to be done to serve Canadians in the future while not also becoming a drain on them as taxpayers. Another round of meetings is planned for Toronto, Montréal and Vancouver in late August and September. In addition, all Canadians have been encouraged to give their views by visiting canadapost.ca or by mail.
In concluding the Sunday e-mail for this week, let me just say that one thing is clear. Canada Post will be using this most recent C.D. Howe report just as it used the Conference Board of Canada report to try and create public opinion in favor of its drive to wreck the Canadian post office as a much needed public infrastructure and bring about its privatization.
It will also use these reports and the monopoly media news reports on the question of the future of the post office to further its attacks on postal workers by advocating more wage and contract concessions, especially attacks on our job security clause and our defined benefit pension plan.
Postal services will also come under serious attack in the near future as Deepak Chopra and the Board of Directors for Canada Post continues to deliberate on “options” regarding door-to-door delivery and every day services for both rural and urban communities.