Despite the increased costs of postage, a steady decline in the use of letter mail and continuing cuts to its workforce, Canada Post has a future, says the man who heads the Crown corporation.

“This institution has incredible capacity to reinvent itself,” said Canada Post president and CEO Deepak Chopra in a feature interview on CBC Radio’s The Sunday Edition.

During the interview, Chopra addressed the high price of stamps, the decision to eliminate doorstep mail delivery to millions of urban Canadian homes and the economic health of an organization that has fewer people working than collecting a pension.

Chopra was unapologetic about the March 31 increase in the cost of postage, pointing out that the average Canadian buys only two stamps a month, “so the impact on them is negligible,” he said.

“You’re trying to balance the needs of protecting the postal system for all Canadians and trying to figure out, how do you balance the books? These are some of the difficult choices we had to make.”

Chopra said the post office was built on the premise that it would provide uniform delivery to all Canadians and that citizens would support the service by using it, but said Canada Post can no longer count on that support.

CANADA-POST

Recent changes to Canada Post won't just hurt the urban residents who'll lose door-to-door delivery. Many businesses still rely heavily on the mail to send cheques and invoices to suppliers and will feel the pinch of higher postage rates. (Chris Wattie/Reuters)

“I think what has happened is that Canadians have quietly walked away from their end of the bargain, of this unwritten social contract,” he said.

The result is 1.2 billion fewer pieces of mail over the last six years, which has led to almost $800 million in lost revenue. At the same time, Canada Post has had to service 1.2 million new homes.

A two-tiered system?

Chopra says that due to "evolution," Canada has developed a two-tiered postal system, wherein a majority must pick up their mail from a post office or community mailbox while a minority continues to enjoy home delivery.

He outlined stark differences in the annual costs involved: $60 per address to deliver to a rural post office; $120 per address to deliver to a community mailbox; and $275 per address for door-to-door delivery.

The latter, still available to about five million homes, is costing Canada Post about $500 million per year, “which we supported and managed as long as we had the mail volumes to support it, but it’s no longer sustainable,” Chopra said.

Enright asked Chopra whether he regretted his earlier statements that walking to pick up their mail would be healthy for senior citizens who need more exercise.

“We have to be thoughtful,” he replied. “We know it will cause hardship to some Canadians as they transition from one mode of delivery to another. We’ll be very thoughtful and sensitive to those needs and we have processes in place to accommodate those situations where it’s a case of hardship.”

The mayors of several major Canadian cities – including Jim Watson of Ottawa, Denis Coderre of Montreal and Gregor Robertson of Vancouver – have expressed concern about the location of community mailboxes in high-density neighbourhoods.

Chopra said Canada Post will be working with municipal officials to find solutions that make the most sense and is considering locations where people will pick up their mail as part of their daily routine.

Canada Post parcel service

Canada Post announced in December 2013 that it would phase out door-to-door delivery of regular mail to urban residents and increase the cost of stamps in a move to reduce financial losses. (Evan Mitsui/CBC)

“Obviously you cannot put a community mailbox on a high-density street where there’s no safe place. We have innovative ideas coming forward to us. We have drug stores, convenience stores and grocery stores across the country saying, ‘Look, why don’t you integrate in the high-density neighbourhoods?’”

The problem with comparisons

Chopra dismissed comparisons to other national postal services, such as Britain, which has delivery six days a week, even to the most remote parts of the country. He said the U.K. has two per cent of the land mass of Canada, twice the population and 2.5 times the mail volume. 

He said the drastic reduction in the number of letters Canadians send is gradually being offset by the steady increase Canada Post is seeing in parcel delivery, its fastest-growing sector in the era of online shopping. Purolator, which is 91 per cent owned by Canada Post, is the preferred delivery company for business-to-consumer packages.

Chopra sees an opportunity to improve this service. He says the challenge is to find a way to accommodate the 40 per cent of Canadians who are not home during the day, when most parcels are delivered. 

He rejects, however, the idea of expanding Canada Post’s mandate. For example, the Canadian Centre for Policy Alternatives and the Canadian Union of Postal Workers endorse the idea of a postal bank, which has been a profit centre for other post offices around the world.

Canada Post – which offered banking services until 1969 – has more than 6,400 branches across the country, more locations than all of the McDonald’s and Tim Horton’s franchises combined.

“There is no core competency left in our corporation since 1969 to start a bank and, secondly, the Canadian population is well served with credit unions, banks and branches at every corner all across the country,” Chopra said.

“You have to take your scarce dollars and put them into areas where you have a higher probability of winning, not into speculative areas which have not been operational in for decades.”