OECD Recommends Privatization of Canada Post

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ReeferMadness
OECD Recommends Privatization of Canada Post

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ReeferMadness

The OECD is recommending that Canada Post be privatized to increase economic growth.

Quote:
The Canadian government should privatize Canada Post as part of a broader plan to improve the nation's economic productivity, the Organization for Economic Co-operation and Development said in a report Wednesday.

The OECD's "Going for Growth" analysis of 30 western economies comes just days after Finance Minister Jim Flaherty floated the possibility of selling off Crown corporations to trim Canada's ballooning national debt.

Nothing to see here, folks. Just the continuation in the race to the bottom. See most of you there.

Fidel

They should recommend nationalising our profitable banks financing foreign takeovers of Canada with Canadians savings. And they are profitable today after so many taxpayer funded bailouts since Mulroney.

Doug

Japan's put postal privatization on hold - though there it's a more complex issue because the post office is also an important financial institution. There's been varying degrees of privatization of postal services in Europe - for the most part incomplete privatizations with governments maintaining majority ownership. Results are mixed. Employment's down, which is no fun if you're a postal worker but implies better productivity. The services haven't got any cheaper and they're less available in rural areas. So no, it's no panacea for growth and just the idea itself doesn't mean much since there are so many different ways of privatizing.

milo204

hopefully our friends in the postal workers union would make a serious attempt to block this.  its.probably just another phase of the massive wealth transfer to the rich that had the government buying billions in mortgage backed securities and continuing to slash corporate taxes.

 

Fidel

[url=http://74.125.93.132/search?q=cache:BXaEkxAcVj0J:www.psiru.org/reports/2... crisis and public services[/url] (Europe) 2008 

psiru.org/reports/2008-12-crisis-1.doc

Quote:
Postal services

The crisis has probably halted the privatisation and commercialisation of post offices in the EU. It has also re-established the importance of banking services through a state-owned institution, which the public can trust more than the commercial banks.
In the UK, the new trade secretary Mandelson expressed the view that the Post Office should keep a key contract, which was expected to have been awarded to a private contractor, in order to strengthen its role as a trusted bank. However this was followed in December 2008 by a proposal to sell part of the Post Office to a pre-selected private company. 45 Opposition in France to the privatisation of La Poste was strengthened by the crisis, with the French government postponing its privatisation plans: “Henri Guaino, one of President Nicolas Sarkozy's closest advisers, said there was no question of opening up the capital of La Poste for the moment given the current market turmoil” 46. In Germany, the damaging effect of commercialisation was apparent, as the banking subsidiary of Deutsche Post, Postbank – the bank with most retail customers in Germany - recorded losses of €449 million in the third quarter of 2008, as a result of ill-judged investments with Lehmann Brothers 47; while DHL, its express delivery service, pulled out of competing on express domestic deliveries in the USA (cutting 9,000 jobs in the process) , where it expects a loss of €1.5billion in 2008.

KeyStone

I saw the report and while I agree with them that we need greater competition when it comes to the Telecom industry, I was somewhat mystified when it came to their suggestion to privatize Canada Post.

Even the United States has a government run postal service. What are the inefficiences that the OECD thinks that privatizing Canada Post will bring.

There is a fallacy out there, that anything run by the government will automatically cost more than if it is run by the private sector. This is largely true, due to the fact that government positions are unionized and therefore pay higher salaries and benefits. However, the exception to this rule is when the private corporation is a monopoly. Without competition to lower the prices, a private company will charge just as much, if not more than the government sector did.

The other option is to allow the private sector to compete with Canada Post. Often what we see here, is the private company offering cuthroat prices to make Canada Post look bad, all the time lobbying the government and having PR wars to convince the government to get rid of Canada Post. Of course, as soon as they do - prices will soar.

In addition, the private sector will cherry pick. They will take the runs from Toronto to Montreal but mail from Rankin Inlet is going to be forgotten about.

Then there is the additional hassle of having multiple mailboxes, stamps, delivery systems, private corporations needing keys to enter your apartment complex etc.

The OECD may not be as bad as the IMF or the World Bank with its suggestions, but I would say that they certainly missed the mark on this one. Sounds like the lobbyists and pseudo-economists have breached the integrity of the OECD.

Lard Tunderin Jeezus Lard Tunderin Jeezus's picture

KeyStone wrote:

I saw the report and while I agree with them that we need greater competition when it comes to the Telecom industry, I was somewhat mystified when it came to their suggestion to privatize Canada Post.

We need to nationalize the telecom industry in Canada (After all, we paid for it through subsidies). Only then will we be able to implement new standards quickly, and place ourselves on the cutting edge of technology.

After that, I don't care if they privatize Canada Post.

Fidel

Lard Tunderin Jeezus wrote:
We need to nationalize the telecom industry in Canada (After all, we paid for it through subsidies). Only then will we be able to implement new standards quickly, and place ourselves on the cutting edge of technology.

Hear-hear! LTJ rocks!

And I didn't know it,  but Canada Post does NOT offer financial services. Can you imagine that?

And if they privatize Canada Post, we can bet that the feds will want to keep postage-free mail services to Northern Canada and to blind Canadians for taxpayers to pick up the tab while handing all the profitable routes to rich friends of the party.

epaulo13 epaulo13's picture

..for years the feds have tried to privatize the post office. CUPW has been the deal breaker. no matter who bought the place they inherited the union. so far this has held.