Mark Carney clearly loves a nation-building project — as long as it’s wildly expensive and is pleasing to corporate interests.
That seems to be the takeaway from the prime minister’s decision last week to largely abandon Canada Post, an institution with a vast network of 5,900 outlets across the country that’s been tying Canada together since Confederation.
In recent years, Canada Post has lost large amounts of money and is currently in the midst of a strike by postal workers. Carney’s response is to effectively gut it, ending door-to-door mail delivery (where it still exists) and resuming the closure of post offices across the country.
This plan for disembowelling Canada Post was first advanced in 2013 by Stephen Harper’s Conservative government, which was always keen to cut public services and hand them over to the private sector.
Now Carney is picking up this destructive scheme rather than opting for ways to use the already-established national infrastructure of the post office to actually strengthen Canada.
By gutting Canada Post, Carney is throwing Canada’s mostly-unionized 62,000 postal workers to the wolves, forcing them to compete in an industry increasingly shaped by anti-union, low-paying private delivery companies like U.S.-based Amazon.
Amazon and other non-union companies have become major players in the lucrative delivery business in urban and suburban Canada, and they’re able to leave the less profitable rural and remote regions to be serviced by Canada Post.
One solution to Canada Post’s financial difficulties would be for it to maintain a properly-paid unionized workforce, and to make up any shortfall by offering new services — particularly banking — through its network of postal outlets.
Actually, banking wouldn’t be a new service. Canada Post offered “postal banking” for more than a century.
And it was a big money-maker, even though Canada Post typically offered its banking customers higher interest rates on their savings accounts than the private banks did. The private banks never liked the competition, and continually pressed Ottawa to end postal banking, which it did in 1969.
Postal banks continue to operate successfully in about 100 countries, with particularly profitable postal banks in France and Japan.
Interestingly, in the Harper years, senior executives at Canada Post were supportive of the idea of resuming postal banking as a way to compensate for revenue shortfalls, according to government documents obtained under an Access to Information request by Ottawa-based Blacklock’s Reporter.
The documents showed that, after studying the experience of other countries, Canada Post executives concluded that postal banking could be a “win-win” way to subsidize home delivery and serve rural communities.
But Harper wasn’t interested in a win-win solution that would bolster the public sector, while annoying the major banks and private delivery companies. And neither, apparently, is Carney.
However, the case for resuming postal banking — and possibly using the post office’s national network to provide other services, such as high-speed internet — remains strong.
There are some 1,200 rural communities across Canada that have no bank branch or credit union, but they do have a post office. First Nations communities are also poorly served by banks, notes John Anderson, author of “Why Canada Needs Postal Banking.”
Even in urban areas, low-income Canadians could benefit from postal banking. With the private banks increasingly focused on providing “wealth management” for the well-to-do, hundreds of thousands of low-income Canadians are obliged to turn to payday loan businesses that charge exorbitant interest rates — as much as 365 per cent a year.
Canada Post could charge far less, thereby providing significant savings for low-income people while earning profits to subsidize mail delivery.
Reviving postal banking may not be the big, flashy sort of project that seems to excite Carney. But shouldn’t protecting Canadian workers from the ravages of the gig economy, and using a national network to provide vital banking services to rural and low-income Canadians, also qualify as a form of nation-building?
This article originally appeared in the Toronto Star.
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