Deadline for decision on Canada Post home delivery missed as Liberals ponder way forward

The promised deadline for a decision on whether the Liberal government will restore door-to-door mail delivery has passed — with the government now saying it will announce its decision on the future of home delivery sometime before the end of 2017.

Minister of Public Services and Procurement Judy Foote had promised a decision would be announced this past spring, but the government has backed away from that timeline.

"Our government is delivering on its promise to suspend the conversion to community mailboxes and undertake a review of Canada Post," said a spokesperson for the minister in an email. "It's a complex issue and we want to make sure to get it right for all Canadians." ​

The president of the union representing postal workers said he's not buying that explanation.

"We've given lots of opportunities for this government to get this right, and unfortunately they've decided to delay, dither and do nothing," said Mike Palecek, national president of CUPW.

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The previous Conservative government made the controversial decision in 2013 to phase out door-to-door delivery in favour of community mailboxes, arguing that it was necessary in the face of looming financial difficulties for Canada Post.

Both the Liberals and NDP campaigned against the move in 2015. Once in office, the Liberals put a moratorium on any future conversions of home delivery to community mailboxes.

The postal workers union has argued that the pessimistic financial forecast for Canada Post is overstated and that the government is ignoring solid business ideas, such as getting into the retail banking business, that would help the Crown corporation's bottom line.

"The truth is that the postal industry is a changing industry, not a dying one," said Palecek in an interview with CBC News. "Yes, we're seeing a steady decline of letter mail volumes, but we're also seeing rapid growth in parcel volumes at the same time."

'Trying to buy time'

But Ian Lee, an associate professor at the Sprott School of Business at Carleton University, said Canada Post's audited financial statements show the increase in parcel volumes is not enough to offset the decline in letter mail. 

He said the statements also show that the corporation is headed toward increasing losses, a reality, he said, that puts the Liberals, with their campaign promise, in a tough spot.

"They're trying to buy time," said Lee about the government's delayed decision. "They want to go south, but all the empirical, evidence-based data says they should be going north. And so they may be, in essence, paralyzed by their political inclinations versus their evidence-based inclinations."

Documents obtained through Access to Information show the government is not convinced by the union's argument that Canada Post is financially healthier than it is being portrayed.

"Financial projections suggest that under status quo operations, Canada Post will incur significant ongoing losses going forward," according to a briefing note for the minister of finance in April. "These losses would impact directly on the government's fiscal position."

Lee said that's the heart of what the Liberals, already running deficits, are afraid of.

"Those losses would become an albatross on their shoulders in the next election," he told CBC News.

Committee report

The government is reviewing two reports, one from a task force it created that produced a discussion paper in September 2016, and one from the House of Commons government operations committee that tabled its report in December 2016.

NDP MP Erin Weir was on that committee.

"One of the reasons our committee pulled out all the stops to complete and present the report in 2016 was to give the government enough time to review it and respond to it in the spring of 2017," said Weir. "So it is surprising the government hasn't come out with anything seven months later."

The committee's report noted that 830,000 addresses had been moved to community mailboxes to date, saving $80 million annually. But it also recommended the freeze on converting people to community mailboxes be maintained and to partially restore door-to-door delivery by bringing it back to those who lost it after the 2015 election campaign started.

Weir warned there would be repercussions if the Liberals do not follow through on some form of restoration.

"I think it would be another broken promise and a fairly blatant one," he said.

The report also recommended that the government modernize Canada Post's defined benefit pension plan so that it is no longer subject to solvency funding requirements, meaning that the plan would no longer hurt the Crown corporation's bottom line.