November 17, 1997
End Mail Monopoly To Fix Service
As the nation grinds inexorably towards a postal strike, management and labour at Canada Post seem incapable of reversing the antagonistic rhythm that regularly has left us with no service at all.
Boys will be boys, after all. Despite comparatively high wages and light working conditions, the Posties have talked themselves onto a rhetorical limb. "Negotiate, don't legislate," chanted about forty of their handpicked "representatives" as they stormed the Public Works minister's office in Hull some weeks back. They seem completely blind to the ongoing communications revolution around them that makes their services less valuable.
The mandarins at Canada Post have not conducted themselves much better. Tempers among the rank-and-file are thin when, time after time, they come away from the bargaining table with evasions and obfuscation. Positioning seems more important than plain language about unavoidable market and technological realities.
In the meantime, the public sits through the usual wave of disruption and the economy, finally growing again after years of stagnation, weathers another storm. Is there no way out?
They found one last year in Britain. The Royal Mail offered what looked like very generous terms: a £100-million package of increased benefits, which included pay raises, job guarantees, a shorter working week, more holidays, and a training program unrivalled in British industry. The union bosses refused to let their members vote on it. Instead, they subjected the country to a series of 24-hour walkouts.
The British government came up with a unique solution. It revoked the post office's monopoly on first-class mail, starting in the middle of July. A month later, tens of thousands of postal workers were ignoring the union's schedule of rotating strikes and reporting to work. By the first week in September, with service mostly restored, the Minister of Trade and Industry reinstated the monopoly privilege. Nevertheless, he made it clear that he was prepared to remove it again, this time for a period of three months, if more labour action followed.
"If that happens," said the Royal Mail's CEO on September 5, "it will give the increasing number of Royal Mail's competitors a free rein, allowing them to establish a foothold in our markets-and that would mean that, far from being able to offer better pay, conditions and job security, the jobs of many postmen and women would be at real risk. It is unreal for the union to be even contemplating the escalation of industrial action. . . That would be nothing short of suicide."
What the Canadian federal government must understand, before it can take such drastic action, is one clear fact. What gives the post office unions the power to shut down the nation is not the essential nature of the services they provide. Their ability to wreak havoc stems from a monopoly privilege. Dozens of Canadian companies now deliver junk mail door to door, at significantly lower prices than the post office. Revoke the first-class letter monopoly and watch as service choices expand and explode faster than instant noodles.
The post office has a stranglehold on the economy because it is the only provider of first-class mail delivery. Allowing competitors would divide and conquer that threat. Then, unwise, strike-happy unions and the obfuscating managers that provoke them could only inflict limited damage on the country.
In countries like Sweden and Singapore, where no monopoly arrangements exist for mail delivery, post offices have become aggressive, expanding companies that keep their trade by virtue of efficient, modern service. The European Union is moving in that direction, with scheduled reductions in the scope of national monopolies and it will end up, within the next five years, with full competition.
In North America, we hang on to our antiquated, protected monopoly postal service. What do we get for it? Less service and higher prices.
One stroke of Canada Post Minister Alphonse Gagliano's modernizing pen can end all that.
The Frontier Centre for Public Policy
is an independent public policy think tank whose mission is "to broaden the debate on our future through public policy research and education and to explore positive changes within our public institutions that support economic growth and opportunity."