Just over a week ago, a small news agency based in Ottawa called Blacklock’s Reporter revealed that they had obtained a report that showed Canada Post had seriously investigated postal banking as an option for picking up the corporations’ flagging revenues.
The Canadian Union of Postal Workers (CUPW) has been beating the drum of postal banking — where the post office offers the same financial services as a bank — for sometime, predating the December 2013 announcement that there would be significant job cuts and the end of door-to-door postal services. They considered it an extremely viable option to help diversify revenue streams for the company, and had a well publicized Canadian Centre for Policy Alternatives report that backed them up.
I asked my media contact at CUPW if they could send me a copy of the report Blacklock’s had provided them. I was warned that the contents were thin, as over 700 pages had been redacted. But I told them to send it along — as a rule, I don’t report on documentation I haven’t gotten to analyze myself.
But what I got in the mail a few days later wasn’t just thin — it was emaciated. Over 100 pages of PowerPoint presentations and internal memos stripped of all content save their titles and email cc’s, exactly as Blacklock’s had received it. It seemed unlikely I was going to get much out of the documents.
I did learn some things though.
I learned that information on postal banking had certainly circulated to senior management at Canada Post. Emails were sent to Wayne Cheeseman, CFO, and Jacques Cote, Group President — Physical Delivery Network, with a research brief and a note mentioning banking discussions before the holiday, in January 2011. Another email, sent October 22, 2013 to Cheeseman titled “RE: Retail banking” was also circulated to CEO Deepak Chopra. However, aside from the email titles and a few odd remaining sentences in the body of the emails, there was no other information.
There were also at least three PowerPoint presentations, all from 2010, about whether Canada Post should diversify into postal banking. They were, like the emails, stripped of all content except the slide titles, which included “the size of the prize,” “what services should be offered” and “this would be a win-win strategy.”
The only meat left in the documents was a fairly thorough investigation into how other countries operate postal banking systems. As their own documents show, banking has turned out to be fairly lucrative for some post offices – in Italy, for example, postal banking accounted for 78 per cent of their total profits in 2009. The name of that slide, in case you were wondering? “Banking — a proven diversification strategy.”
Some people would probably say that this evidence seems to indicate the people researching postal banking liked the idea of it. But with all that has been redacted, there is no way anyone can say that with certainty. It is possible that the PowerPoints on the impacts of postal bank could never have been show to senior management or the emails, with direct titles on postal banking shown to senior management, were filled with pictures of cute cats. Who knows?
My next instinct was to try and find the contact for people included in some of the memos, but that quickly turned into a fruitless search for any useful information on Canada Post’s website, which only lists bios for senior staff — no contact information.
When I went to the media hotline, I got directed almost immediately to a voicemail that told me someone would get back to me shortly. I left a message explaining that I was the labour beat reporter for rabble.ca and that I was doing a story on postal banking and the report Blacklock’s had found. Later that day, I got a statement emailed to me from Anick Losier, the director of media relations.
I’ve included the full statement below, but the gist is this — Canada Post decided that it was not feasible for them to pursue postal banking because they couldn’t compete against the existing banks in Canada, among other reasons.
CUPW counters this, naturally. They still consider postal banking to be a key component to expanding the company. “For us it’s really something important because that can generate revenue at Canada Post to really maintain the postal service,” explained CUPW National President Denis Lemelin over the phone Wednesday afternoon.
CUPW may be right. And Canada Post may have had very good reasons for not going forward with postal banking. But without the evidence, all there is to report on is Canada Post’s word versus CUPW’s word — and some eyebrow raising slide titles and emails.
Under the Access to Information Act — the statute that allows journalists to get government documents — portions of the record can be severed for a whole host of reasons. Information that could interfere with the competitive position of a government institution, that could give away trade secrets, that is advice developed for a government agency — all of these are justifiable reasons under the act to strike information from documents requested by journalists or whoever else cares to look for them. Is there any wonder, with exceptions as broad as these that over 700 pages and more were cut?
This is why some have called for an overhaul to Canada’s access to information laws. Our public institutions, including Canada Post, have to be held accountable. But the Access to Information Act provides an escape hatch for government institutions should someone come looking for what they don’t want found.
CUPW has formally requested, via letter to CEO Chopra, that Canada Post release the rest of the 800 pages — they argue that Canadians have a right to know what they contain given that corporation is publically owned. For my part, I sent a follow-up email to Losier asking why so much was redacted and what it contained — as of now, I have not received a response.
CANADA POST’S STATEMENT RE: POSTAL BANKING
With Canadians mailing less and less each year, Canada Post has to make difficult decisions to secure the postal service for everyone. These decisions do not only involve reducing costs, but must also include finding new ways to generate revenue to replace the loss of revenue due to the historic decline of transaction mail.
In past years, Canada Post carefully considered many opportunities to grow revenue. They included finding new business lines that were outside of our core competencies and expertise, such as banking. We concluded that Canada Post’s growth strategy must be anchored in our core competency as a transportation and logistics company. We have decided we should focus on the delivery business we know, rather than venture into businesses where we would be starting from scratch and ill-equipped to succeed.
Banking was one of the potential revenue streams that we carefully considered. But it became clearly evident that the challenges to make postal banking viable in Canada were insurmountable. Banking and financial services are very complex and sophisticated. It would be unrealistic to believe that a transportation and logistics company like Canada Post could replicate the conditions required to be viable in this sector.
Canadians already have access to a well-established network of existing banks and credit unions across the country. It is already a very competitive industry; we would have a very difficult time making a go of it. We can ill afford to place such a gamble on the future of the postal service.
Canada Post has spent decades building an infrastructure and transportation network that cannot be replicated. As we explored new business ventures, it became clear to us that our best opportunity for revenue growth would come from building upon what is already in place and leveraging what we are already good at. That is delivering mail and parcels to every Canadian, every day. Parcels and Direct Mail are the future of this company. The Parcels business is growing and will continue to grow: Canadians are buying goods online and require affordable delivery of those goods in every region and community of the country, not just in the lucrative markets of major cities. There is a strong future for Direct Mail even in this digital era: businesses are working to cut through the digital clutter and put information directly into the hands of Canadians they are trying to reach, and Direct Mail is a proven way to achieve that.
While growth prospects in banking are limited, Canada Post sees opportunity in providing financial services like pre-paid credit cards and fund transfers and is already offering them. Our MoneyGram offering is growing as money orders fall out of fashion.