Canada Post to end home delivery

Canada Post saying it's moving ahead with the restructuring plan mandated by the federal government in the fall

Which could permanently end door-to-door male delivery? Ian Lee is a business professor at Carlton University in auto-on

He's also reached research rather than a decline of Canada Post Ian always appreciate you being here

My pleasure Brad

You've been yeah, you've been warning for years, you know that Canada Post business model is unsustainable

So is ending home delivery the moment Canada Post finally admitting that?

Yes, yes, I think it is

I

I've been studying this up. I did my PhD thesis on the Canada Post. I defended 89. It was

850 pages from the beginning when it was created up until it was

Transformed into our crown corp, but I don't want to go into my own history

I did two updates since then for two think tanks and and I used only the audited annual

Reports of Canada Post abled in the problem of the Canada because some people say well

This is Ian Lee's opinion these numbers. They're not my opinion. They're the audited numbers year by year by year

Knowing that leather male has been declining at between 6 and 8% a year every year without exception since 2006

70% of the volume the physical pieces of male have vanished from the post office

Millions and millions and millions of Canadians are using the post office less and less and less and we all know the answer

It's because of cell phones is because of smartphones. We don't write our mother or father or grandmothers or grandfathers with letters

We text them. We phone them. We mail them. We you know, so that's what's what's driving this the post office is losing over a billion

Dollars a year is being bailed out

Government called it an investment. It is not an investment the government taxpayers will never get that money back

It's going into this hole in the ground is so to speak and the new prime minister a prime minister carning said last fall

He and the government are no longer willing to subsidize it indefinitely into the future

They've got a restructure which is polite word language or down

Sizing and laying off significant numbers of people because less and less people use the post office

You know, and it really put it into perspective for myself

The last six weeks about six weeks ago my apartment building had a break in and they went after

The mailboxes so they were all screwed up and you know the apartment building had to order parts to get it fixed

And we were temporarily put to another location to go pick up our mail in six weeks in

I went there once to pick up the mail because I was actually expecting some important documents

But aside from that myself and my partner had no need to go to the post office and just walking around the apartment building

I heard nobody complaining about this

You know makeshift office temporarily for us to go grab our stuff

You're absolutely right and I don't want any of your listeners or anybody who works there to think I'm trying to beat up or I've got some

Malice against the post office. I don't it's just that we have moved. I grew up in the old. I'm a boomer

I grew up in the old. I call it the analog society if that's too fancy a word

How about the world of file cabinets and printers and envelopes and stamps

Those that world's gone

Nobody does that anymore. I used to get a paycheck a physically

printed paycheck back in the 80s and I would physically walk it to the bank and put it on deposit

Seriously, well who on earth gets a paycheck

I mean, it's all electronically credited to our bank accounts

96% of all the pensions of all the checks of the government of Canada and they used to issue a huge amount of checks

Old age pension checks, Canada pension checks all electronically deposited

You go to the CRA and look at the stats are on their website

95% of Canadians file their tax returns online once upon a time not so long go people would mail their tax return into the CRA

So our whole world is changed young people know this inside now

And you know the older the occasional older personal right me and say you don't understand there's all kinds of people using

The post office night. I don't I'm not being

Angry if I just say listen if you really don't believe me

Go talk to your grand children

Ask them how many letters they write each week. Can you know what the answer is? I know the answer

I've grandchildren the answer is

Whoa

Well, and you know, you know, Ian we talk about

Canada post and the digital shift and it just seems overall as a corporation Canada post often seem to be

Behind the eight ball whether it's something about the digital shift which we've just covered over the last two minutes

But also the e-commerce boom they didn't seem to catch up to that at all

They didn't they missed the boat completely in fact. I did

When then Frito a Prime Minister Frito

Set up the Blue Ribbon panel back in 2016 to look at the future

I was invited to appear along with many other people and I said look you got a pivot like really very fast

To parcels and become really really competitive because that is the future if there is going to be a future

Why stats can was showing and that data is still good today

e-commerce is growing at nine to ten percent a year every year

So the number of parcels is going through the roof and so I said your future is to be the e-commerce partner

For the partner of the e-commerce companies and while they certainly did set up a parcel division

They never I don't believe they ever took it seriously

They they treated it as sort of a very secondary product line and they were focused continued to focus on letters

Even though letters were collapsing from 2006

So they squandered the last ten years they had a huge opportunity to pivot and shift and focus

On e on parcels and and and downsize in terms of the the mail side

They didn't let me quick figure for you in the last ten years when their letter physical letter mails went volumes went down

70 percent

Their headcount went up up

They're they're volumes are going

Anybody listening runs a business those what I'm talking about your business goes down by 70 percent

So you you go and hire more people this doesn't make sense

No, if you're going down you you you gradually incrementally

Shed some people you maybe have a few hiring freezes to adjust the headcount to the volume a demanded of your company

They went in the opposite direction. They squandered the opportunity

No, you know Ian like I talked about my experience a few minutes ago about not having to to go get my mail and a sort of

Makeshift post office because of the the breaking at my apartment building, but you know there

There will be people out there. There are people out there who will miss door-to-door delivery

You know, I think about rural communities. I think about seniors. I think about the disabled community. How do they adapt?

You know, I looked again, and I don't want anyone to think I mean I've already said I used all the data from the Canada post of course

But I also used other government data. I went to the CRA and said how many are following their tax returns online

I went to service cadents that how many of your checks were presented

Then I went to the camp payments association

Which is a crown corporation of the government of Canada that runs the clearing system and they produce

Unbelievable statistics every year on paper checks versus digital pay transfer of funds versus

Credit card use versus debit card use etc etc

And and so what I I did that was because I wanted to see if this was going on across the society

And and so it was this this again this this phenomena this trend has been going on for the last 15 years

And so the the evidence was out there or stats or excuse me for Canada post to respond

But as I said they they didn't and and they lost their share in in parcels because they were not as

Nimbler dynamic at the private courier companies and and they and and so this is their problem now is that they they're so late to the game

They've got to turn themselves around and become competitive with these private firms

But they've been in denial right up until very very recently

But the need to do so and so what I'm suggesting is either they're going to pivot and become competitive

Or they're going to disappear like blockbuster video did when streaming came out in the late 90s

Well, that leads into the perfect question before I get you out of here Ian and that is you know

Canada post does it remain a crown corporation or is it time to consider privatization?

Well, in a sense it's already being privatized

By us by us refusing to use it and so I don't think anyone would want to buy it because the aisle

Let me go further. I'm predicting now. This is a prediction not based on on not written down anywhere

But based on the decline of the past 15 years of letter mail. I am predicting that within 10 years from now

Letter mail will vanish from our country

That means no community mailboxes. It means no letters and for any way that's way too radical

Denmark okay, it's a small country, but still

Holding six months ago then asked we are no longer going to deliver letters

We will no longer collect letters. We will no longer provide a letter service

Why because the demand had collapsed and so the its Canada post is going to have to

Transform themselves into a parcel company or I predict they will go to business because

Karni has said my mr. Karni has said we are not going to give you a billion dollars a year

So they're going to and home delivery. I predict they're also going to reduce five day a week delivery to the 18 million addresses and Canada

Business and residential they'll get down to two or three days a week as an interim solution until mail vanishes

And at the end on top of that they're going to close a lot of post offices probably turn them into franchises

You know shoppers drug mart or law blogs because they want the volume

The traffic to come into the store to maybe buy their other products and so they're going to do this

This will not save the post office. It will stop the patient from bleeding to death

They're hemorrhaging right now. What they got to do is a stop the bleeding to death

To pivot and reinvent themselves as a parcel post company. Those are both daunting

tasks ahead of them, but they've got to do both Ian good stuff as always. Thanks so much for the time

Thanks very much. Thank you. That is Ian Lee business professor at Carlton University in Ottawa

He's also researched the decline of Canada post talking about

Their memo recently that they are going to move ahead with the restructuring plan mandated by the federal government in the fall

Which could permanently end door-to-door mail delivery