New Brunswick

Chipman touted as possible test site for Canada Post banking

One of Canada's top postal consultants says provinces like New Brunswick with large rural populations could be the perfect places to test postal banking.

Postal banking held up as solution for small towns and villages abandoned by big banks

John Anderson of Anderson Consulting in Ottawa thinks Canada Post should make a return to offering banking services. (CBC)

One of Canada's top postal consultants says provinces like New Brunswick with large rural populations could be the perfect places to test postal banking.

And John Anderson says the village of Chipman, which is losing its Scotiabank in October, would make an ideal starting point.

Anderson is the principal of Anderson Consulting in Ottawa and the author of several reports on postal banking systems. He testified in May before the task force looking at the future of Canada Post and spent an hour urging the Crown corporation to consider a return to postal banking.

"Most countries in the world have postal banking so it's very common," Anderson said. "It's not something which comes from some weird, crazy idea.

Dates back to Confederation

"It's really only Canada and the U.S. which is sort of a big bloc where we used to have postal banking and then we cancelled it. In Canada we had postal banking right from Confederation. It's one of the first things brought in and why it was cancelled, that's a PhD thesis for somebody."

Anderson said postal banking was cancelled in the U.S. around the same time. "In those days we often followed along what they did in the U.S. very closely."

It only makes sense for Canada Post to fill the gaps left by chartered banks as they abandon small towns and villages, said Anderson.

"Canada Post has the capacity to offer financial services and they already do offer many of them,"he said. "You can get a prepaid Visa card. You can get money orders that you can send. They have the e-post program where you can pay your bills so they already have lot of elements which could be put into a new banking system."

Chipman considers idea

Chipman Mayor Carson Atkinson says he's considering approaching the post office to come to his village's rescue and do "basic functions in terms of banking."

Chipman Mayor Carson Atkinson is considering approaching Canada Post to ask about it establishing banking services in the village. (CBC)
"[It's] a function they used to carry through many many years ago."

The mayor is asking Chipman residents and businesses to pledge to move their bank accounts to whatever financial institution he can attract to the village.

Anderson said trusting the post office with your bank account might sound risky to some people but it's already done in partnership with banking systems in many other countries. He says that in Switzerland that country has mortgages handled by a private bank while its post office handles the other financial services.

Rural areas losing banks

The closure of banks is hurting too many smaller communities in Canada and the post office can come to the rescue, he said.

"People make the argument that we have so many banks, why would we need a post office bank?" he said. "[It's] because the banks more and more don't cover large parts of the country and large parts of the population.

"In those towns in small town Canada, what you're doing, if you keep closing the banks, is you're just forcing that trend of everybody living in the big cities. And you're also really hurting not just the individual clients  who deal with the banks, but you're hurting small business enormously.

"It's very difficult to run a business if you don't have access on a daily or very close to a daily basis in terms of getting to a bank branch."

Anderson said he told the Canada Post task force that a return to postal banking would be a proven money maker that could also help finance the postal service.

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