Consultation Guidance Document PDF
Message from the Advisory Panel
The Advisory Panel is pleased to undertake this strategic
review of the Canada Post Corporation (referred to later as Canada Post) on
behalf of the Minister of Transport, Infrastructure and Communities and
Minister responsible for Canada Post.
This consultation guidance document has been designed to assist
all interested parties in providing us with input on the key issues that
need to be addressed. We invite you to consider the contents of this
document and we look forward to receiving your views and submissions to help
us in our mandate. The last section of this document will point out the
different ways to communicate with us.
Dr. Robert Campbell, Chair, Advisory Panel
Mrs. Nicole Beaudoin, Member, Advisory Panel
Mr. Daniel H. Bader, Member, Advisory Panel
Table of Contents
2. How to Make a Submission
On April 21, 2008, the Honourable Lawrence Cannon, Minister
of Transport, Infrastructure and Communities and Minister responsible for
Canada Post announced that an external, independent advisory panel had
been mandated to conduct a strategic review of Canada Post. The Advisory
Panel consists of Dr. Robert Campbell (Chair), Mrs. Nicole Beaudoin, and
Mr. Daniel H. Bader. (Biographies of the Panel members are annexed to this
b. Purpose of this document
This document provides background and/or summary information
to stakeholders on the mandate of the Advisory Panel, key issues to be
explored in the Review and on postal services in Canada. The key issues
have been drafted in the form of questions to help focus input from
3. Mandate of the Canada Post
Corporation Strategic Review Advisory Panel
A website for the Canada Post Corporation Strategic Review
has been established at: www.cpcstrategicreview.gc.ca
Interested parties are encouraged to refer to the website for information
on the progress of the strategic review.
b. Written Submissions
All interested parties can provide the Advisory Panel with
written submissions. Submissions will be accepted until September 2, 2008
at 11:59 p.m. EST. All submissions will be published on the website as
they are received, except for information of personal nature about a third
party, or commercially sensitive, as identified by the originator.
Interested parties are invited to provide written submissions
to the advisory panel - electronically at the following email address:
or by mail to the address below:
Canada Post Corporation Strategic
330 Sparks St. (HCCR)
or by fax at:
The Minister of Transport, Infrastructure and Communities and
Minister responsible for Canada Post has mandated the Canada Post
Corporation Strategic Review Advisory Panel to conduct an independent
strategic review of Canada Post to ensure that the Corporation remains
focused and is well positioned to continue to serve Canadians in the future.
The purpose of the review is to examine Canada Post’s
public policy objectives, its ability to remain financially self-sustaining,
and the continued relevancy of the Corporation’s Multi-Year Policy and
Financial Framework, established by the government in 1998.
a. Roles and Responsibilities
The role of the Advisory Panel is to conduct an independent
study and analysis, undertake consultations with major stakeholders inside
and outside of government, take into consideration the public’s
input received through written submissions, and to prepare a report for
the Minister with findings and recommendations.
b. Overview of
A key activity in the review is the consultation process. The
Advisory Panel will hold consultation meetings with various stakeholders,
including government, industry, commercial companies, clients, business
groups, lobby groups, bargaining agents, and other groups which may be
included as a result of the consultation process.
Public consultation will be done through written submissions.
Submissions will be tabulated and analyzed by the Advisory Panel.
The Panel is expected to provide a Report to the
Minister in December 2008. The Report will be prepared in both
official languages and, with the exception of the sections that are
commercially sensitive, will be made public.
4. Key Issues to be Explored
The strategic review will be guided by the following four
- Canada Post will not be privatized and will remain a Crown
- Canada Post must maintain a universal, effective and economically
viable postal service.
- Canada Post is to continue to act as an instrument of public policy
through the provision of postal services to Canadians.
- Canada Post is to continue to operate in a commercial environment
and is expected to attain a reasonable rate of return on equity.
The following questions are designed to help focus input from
stakeholders on four key areas of interest: Canada Post’s market and
competition, public policy obligations and responsibilities, commercial
activities and financial and performance targets.
b. Market and Competition
Since the 1998 Framework was established, the pace of change
in information technology has greatly accelerated. This includes the
continued prominence of the Internet and its increasing popular acceptance
for receiving and paying bills as well as its use for advertising
purposes. Also, the number of addresses in Canada increases by roughly
240,000 per year, requiring letter carriers to deliver to more addresses
with fewer pieces of mail. Postal markets have also changed significantly
over recent years, with many countries liberalizing all or a portion of
their postal services.
Lines of inquiry
c. Public Policy Objectives and
- How have changes in technology, competition and customer
demographics shaped the postal market?
- What has been the evolution of the markets for lettermail, parcels,
advertising mail, and international mail?
- What are the emerging needs of postal service customers?
- What can be learned from these same developments in the postal
services markets in other countries?
Canada Post is mandated to provide affordable, universal
postal service to Canadians. It contributes to Canada’s social
cohesion and economic prosperity objectives by giving Canadians the
capacity to keep in touch and do business with each other and their
governments in a timely, accessible and inexpensive manner. The Government
has been increasingly looking to Canada Post to contribute to public
policy objectives beyond the provision of affordable, universal postal
service as discussed in Section 2 c of this document.
Lines of inquiry
- What are the costs of the universal service obligation and to what
extent do revenues generated by Canada Post’s exclusive mail
collection and delivery privilege offset these costs? How are those
costs and revenues expected to evolve in the future?
- What have been the financial impacts of public policy obligations
placed on Canada Post? How are the costs of public policy obligations
- What are the social impacts of the universal service
- To what extent do all of the public policy obligations imposed on
Canada Post meet the needs of Canadians?
d. Commercial Activities
Canada Post fulfills numerous public policy objectives while
operating in the commercial marketplace. It is expected to be financially
self-sustaining. Increasingly, the government has asked Canada Post to
fulfill additional social obligations with limited funding or
compensation. Despite these pressures, Canada Post has paid out more than
four hundred million dollars in dividends to the Government of Canada
Lines of Inquiry
- What are the internal and external challenges and risks faced by
Canada Post in its effort to ensure its activities generate reasonable
rates of return and contribute to fund its public service
- Which activities or services currently provided should be preserved
as exclusive privileges and which ones should be provided in a more
- Does Canada Post have sufficient latitude/flexibility to perform
successfully in a competitive market environment?
e. Financial and Performance
The 1998 Framework sets out specific service standards,
financial and other performance targets. Included in the Framework are
financial performance targets regarding earnings before interest and
taxes, return on equity, dividend policy, debt to capital ratio, and cost
as a percentage of revenue. The Framework also has letter mail service
delivery standards (urban and rural) as well as rural retail service
standards. Finally, to address the affordability factor of Canada
Post’s public policy obligations, the Framework includes a price cap
formula for determining increases in the basic postal rate.
Lines of Inquiry
- Are the parameters set out in the 1998 Multi-Year Policy and
Financial Framework still valid and provide appropriate
- Is there an appropriate policy and financial framework in place to
ensure that Canada Post can compete successfully in the marketplace and
meet its public policy obligations?
- What are appropriate financial and performance targets for Canada
Post that will reflect its dual public and commercial objectives, and
support its efforts to improve the corporation’s cost structure
and efficiency and meet future infrastructure needs?
- How should service delivery standards be established?
Appendix A – Biographies of Advisory Panel
Appendix B – Terms
of Reference of the Canada Post Corporation Strategic Review
– Annex A: Multi-year
Policy and Financial Framework
Appendix C - Background on
Postal Services in Canada
a. Brief History of Canada Post
The Canada Post Corporation was established on October 16,
1981 through the Canada Post Corporation Act. The Act moved the
provision of domestic and international mail services from the Post Office
Department of Canada to a wholly owned Crown corporation. The Act details
Canada Post’s policy and operational framework and stipulates that
it is to be self-sufficient. The Corporation has the sole and exclusive
privilege to collect, transmit and deliver letters within Canada; other
Canada Post services (such as parcel delivery) are open to competition.
Canada Post and its wholly owned subsidiaries are subject to
Part 10 of the Financial Administration Act (FAA), which provides
the Government’s control and accountability framework for federal
Crown corporations. Canada Post is listed in Schedule III, Part II of the
FAA and, as such, is expected to earn profits, provide a return on the
public’s investment, and pay taxes.
Prior to the establishment of Canada Post Corporation, the
Post Office Department had accumulated losses of more than $4 billion
between 1968 and 1981. The Post Office was subject to frequent labour
disruptions, and service levels had provoked widespread customer
dissatisfaction. There were four national strikes and more than 700 local
work stoppages between 1970 and 1981.
b. Business of Canada Post
Since its creation in 1981, Canada Post’s financial and
service performance and labour relations have improved. The Corporation
has returned significant sums of money to the government in the form of
taxes since 1987 and dividends since 1996-97. Since introducing
independently measured lettermail standards in 1987, there have been
consistent improvements in service. According to Canada Post’s 2006
annual report, Canada Post achieved a 96 per cent on-time delivery
standard for letter mail. There have not been any national strikes since
Since incorporation, Canada Post has expanded its express and
distribution business lines providing products and services that are
complementary to postal service including communications, distribution and
logistics solutions. These are provided through Canada Post itself and/or
its subsidiaries: Purolator Courier Ltd, SCI Logistics Inc, and
In 2006, Canada Post and its subsidiaries employed over
70,000 Canadians. The Corporation processed 11.6 billion parcels and
letters, and delivered to more than 14 million addresses. Canada
Post’s a network of approximately 6,600 post offices and retail
outlets collects letters and parcels throughout the country. It processes
mail through 22 major plants and other smaller facilities. Mail is
forwarded to almost every country in the world.
Canada Post is among the 50 largest Canadian businesses in
terms of revenue and is among the 10 largest employers in Canada. Through
the Universal Postal Union (a United Nations body) and/or bilateral
agreements it also has commercial, operational, and financial links with
over 200 postal administrations around the world.
c. Public Policy
In addition to providing access to affordable postal service
to each person in Canada through the collection and delivery of mail at
postal offices, outlets and post boxes, Canada Post is required to meet a
range of public policy objectives:
- Universal Service Obligation
Canada Post's mandate is to provide basic customary postal service at
affordable rates across the country. This obligation is commonly
referred to as the Universal Service Obligation (USO).
- Materials for the Use of the Blind
The Canada Post Corporation Act provides that materials for
the use of the blind may be sent free of postage, subject to the
conditions and restrictions as set out in the Material for the Use
of the Blind Regulations.
- Government Free Mail
(Canada Post receives $22.21 million per year in
appropriation funding for Government Free Mail and Materials for the
Use of the Blind.)
The Canada Post Corporation Act provides that mail to sent to
and from the Parliamentarians, and certain others such as the Governor
General and the Ethics Commissioner, is free of postage as long as both
the sender and receiver are in Canada.
- Publications Assistance Program
The PAP provides a subsidy to eligible Canadian magazines and weekly
newspapers to offset their mailing costs to addressees in Canada. Canada
Post manages the PAP on behalf of the Department of Canadian Heritage,
and contributes up to $15 million annually toward the program’s -
annual budget. In December 2006, Canada Post was directed to continue to
provide funding to the PAP until March 31, 2009, while Canadian Heritage
determines the best way to support the Canadian publishing industry in
years to come.
- Library Book Rate (LBR)
The LBR is a program that permits Canadian libraries to send library
books through the mail to other Canadian libraries at lower than normal
parcel shipping rates. Canada Post receives no appropriations to support
the LBR. Canada Post has agreed to maintain the current LBR until
January 2009. The Department of Canadian Heritage provides policy
guidance related to the LBR.
- Food Mail Program
The Food Mail Program is a Government of Canada initiative that
subsidizes the cost of moving healthy food to northern communities. The
Department of Indian and Northern Affairs provides funding to Canada
Post to cover the part of the cost of providing commercial air parcel
service to about 140 northern communities.
- Moratorium on the Closure of Rural Post
In 1994, the Government placed an indefinite moratorium on the closure
of rural post offices. The moratorium applies to post offices owned and
operated by Canada Post. It does not apply to franchise post offices,
owned and operated by private businesses.
- Rural Mailbox Delivery
Since 2005, in response to health and safety concerns raised by its
rural and suburban mail carriers, Canada Post has temporarily or
permanently stopped delivering mail to some rural roadside mailboxes. On
December 13, 2006, the Government of Canada directed Canada Post to
restore delivery to rural mailboxes while respecting all applicable
laws. Canada Post is currently reviewing the safety of all of its rural
roadside mailboxes. In cases where delivery to affected roadside
mailboxes cannot be reinstated in a safe, lawful manner mail delivery is
redirected to group mailboxes or local post office outlets.
d. Previous Reviews of Canada
There have been two significant mandate reviews of Canada
Post since its creation in 1981; the first in 1985 (the Marchment Review)
and the second in 1995 (the Radwanski Review).
In response to the 1995 review, the Government established a
set of requirements, including:
- that Canada Post provide an affordable, universal postal
- that Canada Post remain a public institution as long as it continued
to fulfill its public policy role; and
- that Canadians should not be asked to subsidize letter mail.
The Government also confirmed Canada Post’s involvement
in the provision of competitive services such as parcels, courier and
admail, on the understanding that these services would help to maintain
affordable letter mail service. In December, 1998, as a follow-up to its
response to the 1995 review, the Government approved a Multi-Year Policy
and Financial Framework for Canada Post which set specific service
standards and financial goals for the Corporation and established a price
cap formula for the basic lettermail rate.
In addition to these reviews, the Office of the Auditor
General of Canada has conducted regular examinations of Crown
corporations, including reviewing their management practices, controls,
and reporting systems, as well as regular Special Examinations of each
Crown corporation including Canada Post. As well, the Treasury Board
Secretariat did an overall review of Crown corporations as summarized in
its report released in February 2005 entitled “Review of the
Governance Framework for Canada’s Crown Corporations