Privatizing Canada Post could be effective

Germany’s example may be a lesson for Canada: report

German mail customers experienced better delivery and lower prices when their government privatized postal service in that country. Mark Reimer

Canada’s publicly-owned postal system could benefit from phased-in and well-regulated privatization, a report released last November by the Frontier Centre for Public Policy argues.

Canada’s postal system is similar to Germany’s prior to its privatization completed in January 2008. As the only publicly-owned provider of mail services in Canada, Canada Post faces little competition beyond some private parcel services, report author Adrian Vannahme explains.

According to the report, Germany has experienced increased access to postal services, lower customer prices and a constant number of jobs in the postal sector with comparable working conditions. In order for Germany’s success to be replicated in Canada, the report states, continued service to rural areas would need to be encouraged through a lucrative licensing and contracting system linked with universal service guarantees.

While Germany has successfully privatized its mail services, Vannahme notes that privatization on its own will not necessarily yield all of these benefits.

“Privatization is most effective when tied to liberalization and competition,” said Vannahme by e-mail. “Some government oversight and regulation could and should be maintained. If you have these elements in place, privatization would be the better option for consumers, workers and companies alike.”

Colin Craig of the Canadian Taxpayers Federation agrees.

“[Privatization] should always be on the table,” said Craig. “Existing employees should always be encouraged to put a bid in for the work as they often know how the system could be made more efficient.”

Critics wonder how accountable a privately owned and managed postal service would be. Detailed information about company practices and expenditures would not necessarily be open to public scrutiny.

“It’s against the law to probe into a private company’s trade secrets,” said Michael Welch of the Council of Canadians. “We can’t hold the companies accountable in the same way as a public body.”

Winnipeg has experimented with privatization to various degrees with garbage collection services and maintenance contracts for the Disraeli and Charleswood bridges. Craig points to what he understands as a decrease in service complaints since 2005 as evidence of success in the garbage collection service contracting.

In the case of the Charleswood Bridge, however, Welch notes that, in his experience, freedom of information requests have not been as successful as he’d hoped due to concerns over releasing trade secrets.

Winnipeg continues to examine public-private partnerships through the Winnipeg council vote on July 22, 2009 to create a stand-alone waste and water utility. While no further information has been released publicly about the structure or nature of this agency, further council discussions are expected in the next few months.

Published in Volume 64, Number 16 of The Uniter (January 21, 2010)

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