Business
Time to finally privatize Canada Post
From the Fraser Institute
In the 10 years following privatization, prices for stamps and other postal services fell by 11 per cent in Austria, 15 per cent in the Netherlands and 17 per cent in Germany (adjusted for inflation). All these countries now have lower postal prices than the European average.
Canada Post wants to increase the price of a stamp by 25 cents to $1.24 to keep up with inflation and rising costs. But Canada Post has often relied on this reasoning for previous price increases since it stopped being a government department and became a Crown corporation in 1981. Since then, it’s jacked up prices every time it’s had “financial difficulties.”
The source of these difficulties has changed over time. It used to be the modernization of infrastructure, then the problems of pensions, then the rise of the Internet. The answer is, however, always the same. Prices must increase. Indeed, since 1981 stamp prices have increased 98 per cent (after adjusting for inflation). In other words, the price for stamps have increased far beyond the rate of inflation.
Why does Canada Post keep getting away with this?
Because it has a monopoly over most of the letter market in Canada. And while it competes with private companies (UPS, for example) in the parcel market, Canada Post can borrow money at much lower costs than its rivals because it is a Crown corporation ultimately backed by taxpayers. That’s a huge advantage.
Normally, a company facing losses and declining demand would innovate and reduce costs. Otherwise, it would likely be bought out by competitors or go bankrupt. However, due to its monopoly over most of the letter market, Canada Post lacks this incentive. In can simply pass the burden onto consumers by raising prices, which is exactly what it has done since the 1980s. And as a Crown corporation, it cannot be purchased by another company without express approval from Ottawa.
So, what’s the solution?
In Europe, due to a directive from the European Commission, all letters regardless of weight have been open to competition since 2013. The directive does not mandate the privatization of state-owned postal companies; it simply ends postal monopolies. Combined with local liberalization efforts before 2013, this directive has forced state-owned postal service providers to better control costs because they cannot turn to taxpayers (for subsidies) or consumers (by raising prices) to bail them out.
Some countries such as the Netherlands, Austria and Germany went further and privatized their postal operators. With privatization, the discipline of competition is combined with the discipline imposed by shareholders seeking to maximize profits and increase sales.
In the 10 years following privatization, prices for stamps and other postal services fell by 11 per cent in Austria, 15 per cent in the Netherlands and 17 per cent in Germany (adjusted for inflation). All these countries now have lower postal prices than the European average.
Predictably, postal service providers in these countries found new methods of organizing their activities, tying multiple services together to generate economies of scale, and moved fast in adopting new information and logistical technologies. Due to the incentives of competition, providers focused their efforts on controlling costs—a focus Canada Post will never achieve as long as it’s a Crown corporation with a monopoly.
If approved by federal regulators, Canada Post’s latest price increase would go into effect in January. Policymakers in Ottawa should finally put postal liberalization and privatization on the table. Otherwise, it’s only a matter of time before a new problem emerges, which Canada Post will use to justify another price increase.
Author:
From the Fraser Institute
This year’s COP wants to fast-track the world’s transition to “clean” energy, help vulnerable communities adapt to climate change, work on “mobilizing inclusivity” (whatever that means) and “delivering on climate finance,” which is shorthand for having wealthier developed countries such as Canada transfer massive amounts of wealth to developing countries.
Every year, the United Nations convenes a Conferences of Parties to set the world’s agenda to reduce greenhouse gas (GHG) emissions. It’s the biggest event of the year for the climate industry. This year’s conference (COP29), which ends on Sunday, drew an army of government officials, NGOs, celebrities and journalists (many flying on GHG-emitting jet aircraft) to Baku, Azerbaijan.
The COP follows a similar narrative every year. It opens with a set of ambitious goals for climate policies, followed by days of negotiating as countries jockey to carve out agreements that most favour their goals. In the last two days, they invariably reach a sticking point when it appears the countries might fail to reach agreement. But they burn some midnight oil, some charismatic actors intervene (in the past, this included people such as Al Gore), and with great drama, an agreement is struck in time for the most important event of the year, flying off to their protracted winter holidays.
This year’s COP wants to fast-track the world’s transition to “clean” energy, help vulnerable communities adapt to climate change, work on “mobilizing inclusivity” (whatever that means) and “delivering on climate finance,” which is shorthand for having wealthier developed countries such as Canada transfer massive amounts of wealth to developing countries.
Some of these agenda items are actually improvements over previous COPs. For example, they’re actually talking about “climate adaptation”—the unwanted stepchild of climate policies—more this year. But as usual, money remains a number one priority. As reported in the Associated Press, “negotiators are working on a new amount of cash for developing nations to transition to clean energy, adapt to climate change and deal with weather disasters. It’ll replace the current goal of $100 billion (USD) annually—a goal set in 2009.” Moreover, “experts” claim the world needs between $1 trillion and $1.3 trillion (yes, trillion) in “climate finance” annually. Not to be outdone, according to an article in the Euro News, other experts want $9 trillion per year by 2030. Clearly, the global edifice that is climate change activism is all about the money.
Reportedly, COP29 is in its final section of the meta-narrative, with much shouting over getting to a final agreement. One headline in Voice of America reads “Slow progress on climate finance fuels anger as COP29 winds down.” And Argus News says “climate finance talks to halt, parties fail to cut options.” We only await the flying in of this year’s crop of climate megafauna to seal the deal.
This year’s conference in Baku shows more clearly than ever before that the real goal of the global climate cognoscenti is a giant wealth transfer from developed to developing countries. Previous climate conferences, whatever their faults, focused more on setting emission reduction targets and timelines and less about how the UN can extract more money from developed countries. The final conflict of COP29 isn’t about advancing clean energy targets or helping vulnerable countries adapt to climate change technologically, it’s all about show me the money.
Author:
From the Canadian Taxpayers Federation
Average compensation for a federal bureaucrat is $125,300. Cutting back the bureaucracy to population growth would save taxpayers $9 billion every year
Dumb government spending doesn’t stop at the 49th parallel.
U.S. President-elect Donald Trump announced the creation of a Department of Government Efficiency, with a mandate to “dismantle government bureaucracy, slash excess regulations, cut wasteful expenditures, and restructure federal agencies.”
Those marching orders sure would sound good in a prime minister’s mandate letter to a finance minister. And here’s the blueprint they should follow.
Begin with crazy research Canadian taxpayers are forced to subsidize.
The Social Sciences and Humanities Research Council spends $1 billion a year supporting “research and research training in the social sciences and humanities.”
Here’s a little taste of the reports it funds with your tax dollars:
- Gender Politics in Peruvian Rock Music ($20,000)
- Cart-ography: tracking the birth, life and death of an urban grocery cart, from work product to work tool ($105,000)
- My Paw in Yours: Dead Pets and Transcendence of Species Divides in Experimental Art-Making Practice ($17,500)
- Playing for Pleasure: The Affective Experience of Sexual and Erotic Video Games ($50,000)
And that’s just the tip of the iceberg.
Parks Canada put Mr. Magoo in charge of its hunting operations. It spent four years and $10,000 capturing a single bullfrog and dropped $800,000 hunting 84 deer on a B.C. Island. How can a simple hunt cost $10,000 per deer?
Well, hunting gets more expensive when instead of your grandpa’s old rifle, you use prohibited semi-automatic weapons, instead of a box of shells, you get a crate of ammo, and instead of your buddy’s old pickup, you rent a helicopter for $67,000.
Or how about the $8-million barn at Rideau Hall. Or $12,500 live senior citizen sex story shows. Or the $8,800 sex toy show in Germany. Or the millions wasted producing government podcasts no one listens to.
Then there’s government officials living high on the hog.
Governor General Mary Simon spent $71,000 on limo services in Iceland. Bureaucrats spend $76,000 a month renting art. Global Affairs Canada spends $51,000 on booze a month.
Now, the big stuff.
The size and cost of the government is out of control. Prime Minister Justin Trudeau hired 108,000 new bureaucrats. That’s a 42 per cent increase in less than a decade.
Had the bureaucracy only increased with population growth, there would be 72,491 fewer bureaucrats today.
Average compensation for a federal bureaucrat is $125,300. Cutting back the bureaucracy to population growth would save taxpayers $9 billion every year.
It’s time to stop rewarding failure with bonuses.
The feds dished out $1.5 billion in bonuses since 2015.
And the bonuses flow despite federal departments only managing to hit half of their performance targets once in the past five years.
Government executives overseeing ArriveSCAM took $340,000 in bonuses.
The Canada Mortgage and Housing Corporation rubberstamped $102 million in bonuses amid the worst housing crisis in Canadian history.
The Bank of Canada printed $20 million in bonus cheques in 2022, as inflation reached a 40-year high.
The CBC dished out $132 million in bonuses since 2015.
The next thing on the chopping block? Corporate welfare.
Trudeau put taxpayers on the hook for $30 billion in subsidies to multinational corporations like Honda,Volkswagen, Stellantis and Northvolt.
Federal corporate subsidies totalled $11.2 billion in 2022 alone.
Shutting down the federal government’s seven regional development agencies would save taxpayers an estimated $1.5 billion annually.
True efficiency would also mean eliminating failing government operations altogether. The feds should sell any Crown corporation that can, or should, be left to the private sector.
Here are a few examples.
The CBC, which takes more than $1 billion from taxpayers annually.
Canada Post, which lost $1.2 billion in the last two years and forecasts “larger, unsustainable losses in future years.”
VIA Rail, took $1.8 billion in taxpayer cash during the past five years just to cover operating losses.
The bad news for taxpayers is we pay too much tax because the government wastes too money. The list of wasteful spending in this article is far from exhaustive.
Other examples include the multi-billion dollar gun confiscation that police officers say won’t work, the $25-billion equalization scheme and taxpayer-funded media bailouts, among others.
The good news is a champion of taxpayers could make massive cuts and barely anyone outside the Ottawa bubble would notice.
This is the blueprint to slash Ottawa’s wasteful, bloated bureaucracy. All we need now is a prime minister with the guts to pick up the scissors.
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