Backgrounders

CANADA POST CORPORATION AND THE GOVERNMENT OF CANADA

Canada Post was created as a Crown corporation in 1981 as the successor to the Post Office Department of Canada. Canada Post’s mandate is to provide affordable, universal postal service to Canadians on a financially self-sustaining basis. The corporation contributes to Canadian society and to Canada’s economy as an enabler of business activity. It fulfils these roles by providing Canadians with the tools to communicate, transact business and interact with governments in a timely, accessible and affordable manner.

During the past several years, the pace of change in information technology, such as e-mail and the Internet, combined with globalization, have greatly accelerated and impacted Canada Post. Additionally, the number of addresses in Canada has continued to increase every year as traditional mail volumes have dropped, causing letter carriers to deliver fewer pieces of lettermail to more addresses.

Although the Corporation is doing well financially, it is facing new challenges in all aspects of its business. The government believes that Canada Post should remain a Crown Corporation to ensure it is well positioned to meet its public policy obligations while providing the best value for Canadians.

Canada Post offers a variety of traditional and innovative services to connect Canadians. It is an important public institution, with a dedicated workforce of over 70,000 employees. It processes over 11 billion pieces of mail per year and maintains a network of 6,600 post offices in urban, rural and remote locations across Canada. The corporation has been profitable for the past 12 consecutive years and has paid more than $400 million in dividends to the Government of Canada since 1998.

Under its mandate, Canada Post is required to be financially self-sufficient while at the same time providing an affordable, universal service to all Canadians, no matter where they live. Over the years, the Government of Canada has increasingly looked to Canada Post to contribute to public policy objectives beyond the provision of affordable, universal postal service. For example, in 1994 it placed a moratorium on the closure of rural post offices. More recently, the government has taken action on other key postal matters. In December 2006, the government issued two directives to Canada Post. The first required Canada Post to develop and implement an operational plan to restore and maintain mail delivery to rural roadside mailboxes. The second directed the corporation to continue funding the Publications Assistance Program for up to two more years.

Progress has been made on both fronts. Since the directive on rural mail was issued, Canada Post has successfully maintained over 70 per cent of the rural mailboxes at the end of Canadian laneways. Changes to rural mail delivery were made only as a last resort; in every possible situation, rural mail delivery has been and will be maintained.

The Publications Assistance Program provides support to the Canadian publishing industry and is run by Canadian Heritage. Canada Post was to end its financing of this program in early 2007. The additional two years of funding by Canada Post allow Canadian Heritage to establish next steps for the program. Consultations are currently being conducted by Canadian Heritage on the redesign of this program.

In October 2007, the government tabled legislation to amend the Canada Post Corporation Act. The purpose of this bill is to modify the exclusive privilege of the Canada Post Corporation and to permit letter exporters (remailers) to collect letters in Canada for transmittal and delivery outside Canada. Canada Post will continue to have the exclusive privilege for domestic mail throughout Canada. While it is true that Canada Post could see a decline in revenue of more than one per cent associated with the opening up of the international outbound mail market, the bill should not have a significant effect on revenues and operations. Therefore, no job losses, decrease in service or post office closures are expected in the event this bill is passed into law.

For more information on Canada Post, please visit the following website:
www.canadapost.ca/corporateabout/annual_report/index-e.html