Among the most stress-filled possible jobs, undoubtedly there is one new CEO opening that will top most of them – the Chief Mail Delivery Officer for Canada. There are many iconic symbols of Canada, but, if it ever was one, Canada Post certainly has long ceded that status. The Crown corporation predates Confederation, but has not endeared itself to anybody for generations.
Although the strikes and lockouts of yore are gone, the unfunded liabilities in its pensions and benefits are a reminder of its past desperate efforts to mollify its workforce. A resolution, and likely bail-out, of those liabilities could be crucial to making Canada Post truly viable and self-sustaining, whether or not Ottawa has the courage to divest itself of this very old and possibly obsolete organization.
A study performed by the Frontier Centre for Public Policy earlier this year estimated that Canada Post could be worth as much as 10 to 11 billion dollars (fully taxed); much more if it were to be made more efficient and rationalized. A second scenario, without unfunded liabilities, improved the theoretical value, but not enough to offset the cost. However, this is purely a mathematical issue; in the real investment world, a low-debt, unfettered Canada Post would be worth far more than it is currently.
That is the crux of what needs to be considered when hiring a new chief executive who is to guide the company for the next few years: allowing full scope for the company to operate as it sees fit, with as few constraints as possible, both to maximize profitability and free cash flow, and to offer affordable and responsive services to customers, whether households or businesses.
This scope or freedom to pursue business as it sees fit has long dogged the firm. While it has a monopoly on using home mailboxes and on home letter delivery, it must also deliver mail to anyone, anywhere in Canada, no matter how remote or how costly or impractical it may be. Politicians are very sensitive to any complaints relating to curtailing or modifying mail service, as exemplified by the rollback of the smart mailbox deployment and proposals to reduce the frequency of mail delivery.
Yet nobody seems to critically examine these complaints, or the reality of how mail service is received or conducted today. Few people get mail delivered to them every day a week, currently. Most is direct mail advertising or promotion. Utility, insurance, bank, government and other important notifications, invoices, offers, and similar things are all available by Internet or cell phone, as are periodicals.
Parcels are commonly sent via courier services; sometimes with no charge, depending on the items and suppliers. People living in remote communities already get food and other deliveries by airplane or other conveyance; letters, cards, other communications can be loaded with them. Where Internet service is not available, there is also smartphone service by satellite communication. Even though this is not cheap, it certainly can be deployed. Bill payments can be arranged with banks and other institutions to be automatically deducted. Government and other cheques can be directly deposited. There are call centres for nearly every organization that handle issues much more responsively than by mail.
There are many reasons to allow the new Canada Post CEO much more latitude to run the company in a way that serves the needs of the customers of today, not 1867, or 1967, or even 1997. To maximize the value and utility of this company, and its viability, it should be permitted as free rein as possible. This could mean that Ottawa will have to take on most or all of the unfunded liability. It could be a small price to pay to ensure that this company and its employees will survive and prosper, and that the rest of us might, eventually, get some money back, when, like the ancient Royal Mail in the UK, and the Dutch and German postal services, it is finally sold off to investors who can and should take on the risk of this firm not being able to compete in a rapidly changing economy.