It’s not every day that a front porch is pictured on the front page of a national newspaper. But that’s what the National Post highlights today as part of an article by William Watson, a free market inclined economist at McGill University.
Watson received a notice from Canada Post telling him that his porch constituted a danger to letter carriers. The peril allegedly lies in the fact that Watson’s porch has no railings that delivery persons can hold onto when climbing the steps. Prof. Watson has been given until October 21 to install railings. If he doesn’t comply, his mail will be sent to a post office located about 2 km from his house, a service for which, get this, he would have to pay an estimated $15 per week.
Watson points out that private mail carriers, such as UPS and FedEx, have often delivered packages to his house, with no complaints. This is telling, for no private mail company would dare make delivery conditional on the installation of hand railings, unless the risk to carriers was manifest and compelling. Even then, they wouldn’t charge customers for the privilege of picking up parcels at their offices. After all, this is no way to win and keep customers.
Of course, the reason that Canada Post can do otherwise is that it has been granted a monopoly by the government over the delivery of letters. As Section 14 of the Canada Post Corporation Act states: “the Corporation has the sole and exclusive privilege of collecting, transmitting and delivering letters to the addressee thereof within Canada.”Â The legislation stipulates various exceptions that allow courts to deliver summonses and private individuals to drop off letters for their friends.Â Urgent letters are also exempted, but the price charged for delivery must be three times the equivalent rate for Canada Post.
The original rationale for the monopoly on the delivery of mail was that only one firm could achieve minimum costs of production in the industry– in other words, it was thought to be natural monopoly. That being the case, so the argument goes, the public interest is best served if the government oversees it. But the existence of several private delivery services operating in the market today reveals that logic to be no longer valid, if it ever was.
The only remaining argument for Canada Post’s monopoly is that opening up letter delivery to competition would adversely impact people in rural areas. Delivering mail to such areas would not be as profitable as serving urban routes. Rural businesses and residents would have to pay more.Â With its monopoly, Canada Post can afford to keep prices low for these customers through the profits generated on the more lucrative urban business.
But this assumes that everyone should pay the same rate for letter delivery. Why should that be the case? Why should urban dwellers subsidize those who’ve decided to live in the country? People residing there also have to drive longer distances to buy groceries and run errands. If their mail is to be subsidized, why not their additional fuel costs as well? As no one is forced to live far away from a large city, a person deciding whether to do so should have to factor in the extra costs of mail delivery to a rural address against the benefits of living in the countryside.
Besides no longer being commanded to fix one’s house, opening up letter delivery to competition would also make it quicker and efficient.Â It would probably not take so long for letters to get to/from the US and other countries. We might even get Saturday service.
Watson is right: the Harper government should use its majority to abolish Canada Post’s monopoly by repealing Section 14 of the Canada Post Corporation Act.