The Postman Never Rings Twice *
A Canadian postal caper

Thanks to Sheila Fraser, a soft spoken but relentless and fearless Auditor General, the Canadian public becomes aware of “irregularities” taking place in the federal government at regular intervals. Her latest revelation involved André Ouelett, the president of Canada Post. Canada Post is a Crown Corporation — a corporation, separate from the government, but one in which the government is the only or the principal shareholder. According to Canada’s daily newspapers, Mr. Ouelett spent about $2,000 000 (Can) since 1996 on his personal expense account without having supporting data to justify most of the expenditures. (Note: As of September 2004, the Canadian dollar is worth $0.76 (U.S.). He is also accused of circumventing Canada Post’s personnel procedures, and having made some “special hires” as well as interfering in some procurement decisions. It is certainly disappointing that these practices occurred under a democratically elected government and involved a highly paid civil servant. The fact that procedures exist for the discovery of wrongdoing and subsequent prosecution, when warranted, makes the affair less galling.
However, I found Mr. Ouelett’s defense in the press much more objectionable than his alleged misdeeds. He said, in effect, that he had nothing to be ashamed of because in 2003, under his leadership, Canada Post had made a profit of 253 million! Ouelett’s defense could be used as a “case study” of how not to conduct public policy. Canada Post which was created in 1981, habitually ran very large deficits as was the case with the U.S. Post Office. The reasons for this problem were manifold, but certainly involved weak management, unrealistic postal unions and a pervasive tradition of letting sleeping dogs lie. Although the direction was established before Mr. Oulett’s tenure, he was certainly an exponent of a “slash and burn” policy. No one, it seems, really seriously studied what Canada Post’s mandate should be, although there is a large literature on the merits and demerits of “privatization.” Given the large deficits, the first order of business should have been a public legislative discussion of the basic purposes of Canada Post and ways to achieve them. Instead, it was decided that Canada Post could be a “cash cow” which has meant that it was transformed from a universal, good service, at a reasonable price with an unacceptable deficit, to an expensive one, which one could only charitably characterize as mediocre. These are some of the examples of how the “solution” was achieved:

1. No Saturday mail delivery.

2. Post Offices closed on Saturday.

3. Post Offices close during the week at 5:30 p.m. although all retail establishments in their neighborhoods close at 6 p.m. or later.

4. No home delivery for new suburban locations, but clusters of outdoor mail boxes from which postal patrons fetch their own mail. This is very popular during the harsh Canadian winter months.

5. Abolition of “printed matter” as a classification. (However, magazine publishers are offered a contract with concessions.)

6. Abolition of post cards as a separate classification. They are now first class mail, at least in price. A visitor from the United States who sends five post cards home pays $4.00 plus $0.28 sales tax! If the visitor is, say from France or Japan, she or he pays a trifling $7.00 with $ 0.49 sales tax. When it was pointed out to the federal government that no other country charges sales tax on its own stamps, the response was that the stamps were sold by a separate corporation. This is a fine point and perhaps legally defensible, but is in fact part of the “cash cow” solution.

7. The establishment of numerous sub-post offices in drug stores. These are open on Saturday and later than 5:30 p.m. during the week. The clerks are employees of the drug stores, and in most cases are reasonably competent, with occasional “experts” thrown in. At first blush, this seems like a stellar cost-savings move. But no one apparently considers how this change from relatively expensive federal employees to cheaper store clerks will look 25 years from now. Do the clerks make enough to be able to save for their retirement, or do they have at least contributory pension plans where they are? If not, do they have realistic prospects for better jobs if they take courses at night?

8. Continuous price increases unnecessary for a well-run service and doubly unnecessary for a hugely profitable outfit. Generally, first class mail is increased by a penny a year. However, from 2003 to 2004, letter mail to the United States went up by 15 cents (23%)and overseas mail also by 15 cents (12%). Since this new plateau has been reached, the yearly penny will presumably be added indefinitely, so that middle class people will use e-mail more than ever, and the less fortunate persons will think twice about writing a letter.

9. Expedited service. Express Post is apparently served by outside contractors whose prices are competitive. The less expensive guaranteed four-day delivery is a bad joke. Saturdays and Sundays don’t count. I was charged nearly $15 for this service in order to send an oversized envelope to Providence, R.I. I took the envelope to the Post Offfice just before it closed on a Thursday and it had not reached its destination by the next Tuesday evening. If Sunday is an acceptable holiday, what justifies total paralysis on Saturday?

10. Closing of Rural Post Offices. As inhabitants leave small rural communities, businesses, schools and sometimes even churches shut down. The Post Office is one of the last social gathering places, and yet 1500 were phased out early under the new regime. Canada Post promulgated a policy on these shutdowns in which the social aspects were a consideration but not an important one. The disappearance of these places caused a great outcry and there were moratoria on further shutdowns with the government elected in 2004 pledging to protect the remaining rural Post Offices altogether. Had Canada Post been in more responsible hands, some of these Post Offices could not have been saved anyway, but some could have been, and certainly the process would have had more sensitivity to the neeeds of rural communities.

11. Minor Outrages. (a) It is not possible to insure a parcel for the minimum amount of insurance without also paying for expedited service. I sent a very small book using this service and was charged an amount which compared unfavorably with what it had cost me to send a much larger insured parcel from Post Office in Vermont to Texas. (b) We were notified that in order to collect a parcel which required our signature, it had to be picked up, not from our nearest Post Office, but from a drug store located much further away. Apparently the Post Office did not have sufficient room to store parcels! I do not know whether this practice is still common, but the notice produced dismay, if not contempt.

In summary, we now have a profit-making postal service whose quality is constantly declining while its costs to the consumer are persistently increasing. The burden of these changes falls most heavily not on the people working on Ripostejournal who use e-mail and faxes but on small businesses and the less well off who are not on the “net.” It is all a very “modern” solution. Whether it is a postal service, congested commuter traffic over bridges, aggressive breeds of dogs in cities and towns and hundreds of different policy questions, there seem to me to be three basic questions leading to the best solution under the circumstances:

1. What is our basic aim?

2. What can we learn from the great amount of knowledge and expertise on the subject?

3. What do the individuals affected tell us?

September 2004