Minister of Public Services Joel Lightbound, William Kaplan in his recent “Report of the Industrial Inquiry Commission” on the state of Canada Post and Canada Post itself have all proposed to essentially shut down, or dramatically reduce, many of Canada Post’s key services in response to the labour dispute with the Canadian Union of Postal Workers.
They have all missed major points about Canada Post’s situation. First Canada Post is above all a public service not a profit making business. Do we demand that hospitals make profits? This does not mean that Canada Post cannot make revenues but it is the government’s role to assure it delivers services such as mail and parcel delivery at reasonable costs to the public.
Instead of offering real solutions to Canada Post’s financial deficit issues, the Kaplan report offers only a series of recommendations of mostly cuts such closing down rural post offices, cutting back daily mail delivery to households, and introducing more community mail boxes instead of home delivery.
Second, they have all missed one of the major ways the service could make money… full scale postal banking.
This rejection is all the more startling as over 100 countries have postal banking now. Kaplan said Canada Post has to stick to core services, but postal banking is not something new for Canada. We had postal banking right from Confederation to 1968. We had postal banking for a hundred years, when it was terminated the same year as postal banking also shut down in the USA!
Today, we are in a time where more and more banking and credit union branches are being closed down. We have gone from over 6,300 banking branches in 2014 to only 5,605 in 2023 according to the Canadian Bankers Association. Most Credit unions saw a decline in their number of locations from 1,819 in 2015 to 1,643 in 2023. Desjardins credit union locations specifically went from 1,122 in 2015 to 661 today. Sure, many people do some banking via the Internet but it is hard to develop a relationship with a banking employee to negotiate a mortgage or a business loan over the Internet. Today there are some 5,900 post office locations which could all offer banking services.
In a report, which I wrote for the Canadian Postmasters and Assistants Association (CPAA), I found that in the 2,620 small towns and rural communities with post offices, 1,178 — 45 per cent — did not have a bank branch. In many rural communities, and particularly in Indigenous ones, there never has been many bank or credit union branches. More than 700 Indigenous communities have only about 66 bank or credit union branches. Also, in many poorer urban neighbourhoods along with supermarket deserts there are also many banking deserts where the former branch is now a store or office!
On the other hand, in over 100 countries postal banking and financial services are a major success. In a list of the 50 largest banks in the world, Japan and France postal banks are listed and all have very profitable postal banks along with our big five Canadian private sector banks.
The French postal bank owned by the French Post Office made a net profit of €1.2 billion ($1.8 billion Canadian) in 2024 up 19 per cent from 2023! Japan’s Postal bank made $2.9 billion in profits in nine months this year. Poste Italiane made €5.2 billion ($7.7 billion CAD) in net revenue from its financial services and €1.56 billion ($2.3 billion CAD) from its insurance services in 2023.
Canada Post started again a few years ago to once again offer new financial services such as loans with TD bank, but suddenly stopped in 2023 with no explanation. Again, just before the current period, Canada Post announced it would partner with Koho Financial Services to deliver some financial services, chequing and savings accounts, prepaid Mastercard, and mobile app access. This again is a small start but it’s time to look at offering postal banking owned by Canada Post in a comprehensive manner offering also personal and business loans, mortgages and insurance.
Canada Post can be saved financially and one important development has to be postal banking.
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