Governing in the Digital Age
I have a vivid memory from my adolescence about the first time I used a pay phone. The phone was located in the old Bowmanville Arena on Queen Street where Rotary Park now sits. My Dad let me use the phone after my hockey game to let me tell my Mom that I had scored my first goal. It cost ten cents to make this priceless call and the phone in the arena was just one of tens of thousands that dotted the landscape. Today, you have to look long and hard to find a pay phone or phone booth. In the last five years alone, another fifteen thousand pay phones have been removed because of the decline in use. [http://goo.gl/3yoJdA]
The reason for the disappearance of the traditional pay phone is the communications revolution over the last two decades and rapidly changing consumer habits. Today, 83% of Canadian families have at least one cellular phone and many homes are dropping the traditional phone line and are opting for wireless service alone. [http://cwta.ca/facts-figures/] When my 3-year old son Jack scores his first goal in a few years he will use my cellular phone to call someone after the game. In fact, our entire family will likely already know about the goal because a proud Dad will have already posted it to Facebook for the world to see.
I use this old memory to illustrate how much society has changed in the increasingly connected world of instant communication. Today, people are more likely to email, text or use social media to communicate than they are to use the phone. As people’s habits change, companies and governments must adapt to these changes or risk falling seriously behind. Perhaps the only area of traditional communications to feel the impact of this technological revolution more than the lonely pay phone is traditional mail. I am a big sender of mail and have been for many years because people appreciate the extra thoughtfulness that goes into sending a card or letter. However, as Canadians have adopted email and other forms of instant communication many have stopped using mail services. This decline has been compounded in recent years by the move to electronic bill payment, direct deposit and online banking.
Canada Post is a government-owned corporation that since 1981 has operated independently from government from a financial and operational standpoint. Over the last eight years, Canada Post has delivered one billion fewer pieces of mail than over the previous period and they estimate this decline to continue dramatically in the years to come. Canada Post is operating at a loss and they estimate that the decline in mail use will lead to annual operating losses of $1 Billion per year by 2020. To compound matters, Canada Post also has a pension shortfall that is presently in the $4 Billion range. It was clear to Canada Post that major changes were needed to avoid billions of dollars in liabilities to the taxpayer, so they launched an action plan earlier this year. You can view it here:
The two main ways that Canada Post hopes to reduce its losses are through raising the cost of stamps and by the elimination of door-to-door delivery for those homes that have it. I have heard from quite a few people who are understandably concerned about losing mail delivery on their doorstep, but it is important to note that two-thirds of Canadians do not have delivery to their door. In fact, a majority of the residents in Durham do not have door-to-door service. Rural residents have never had this type of service and newer suburban developments like the one I live in have been using community mailboxes for many years. Canada Post estimates that the cost to deliver to a doorstep is twice as much as delivery to a community mailbox. This is why they have placed this controversial change in their plan to get their costs under control. They have to control costs because they do not forecast a rebound in the use of mail as online communications continue to become the norm.
While Canada Post operates independently, the government of Canada remains the “owner” of the agency. This has led to some voices calling on the government to intervene and stop the changes to mail delivery. I understand the changes are difficult, particularly for some seniors, but I support the changes being made by Canada Post because I don’t want to see taxpayers burdened with billions of dollars in liabilities in the future. I also believe that it is critical for government – and its agencies – to operate prudently and adapt to changes in the marketplace and in society. It would be easy to kick the can down the road and let a government in the future deal with the billions in losses, but I think that actually puts mail service itself at greater risk and it is not responsible governance.