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Should the private sector be the one to deliver Canada's mail?

By Andrew Moran     Mar 26, 2012 in Business
Calgary - Why is the government delivering Canada's mail? Should the free market deliver mail to millions of Canadians instead? These are the questions being posed by two professors at The School of Public Policy.
In an episode of "Seinfeld," Kramer wanted to opt out of the mail delivery system. In his hilarious lines, when asked about how he would receive letters and cards, Kramer responded, “Email, telephones, fax messages, Fedex, Telex, telegrams, holograms...”
Many have been arguing for a long time that mail delivery is becoming an antiquated system. After much debate, is it time we start looking at privatizing Canada Post? Two professors believe so.
According to a press release from Professors Edward Iacobucci and Michael Trebilcock at the The School of Public Policy, a case can be made to question if the government needs to have a role in delivering mail and if it would more viable to make Canada Post a private agency.
“The economic case is clear: there are no apparent market failures in mail delivery that invite state ownership, and comparative experience with privatizing the mail system suggests potential for service and cost improvements,” explained the paper authors.
The professors argue that there are even several alternatives to “full-scale state ownership” as a way to regulate an industry, such as taxes, self-regulation and government agencies.
However, Iacobucci and Trebilcock say that privatizing Canada Post has now become taboo because of those “who have a clear political agenda,” such as the Canadian Union of Postal Workers.
“In our view, there are many sectors where further privatization would be appropriate,” stated the professors. “In many cases, focused government intervention in a privatized market will accomplish the same goals as the public ownership, but at a much lower cost.”
The study also looks at partial privatization of other agencies, such as the Business Development Bank of Canada and the Export Development Corporation.
More about Canada post, Private sector, Mail, The School of Public Policy, postal delivery
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