As we all know, change is continuous. What is standard one day (horse-drawn buggies, rotary phones, fax machines, VCRs, Walkmans) is gone the next. Who knows, maybe one day electricity will be passé.
We are seeing this change with the universal postal service. Postal services of various ilk have been around for millennia. In the 19th century the concept of a universal postal service was established and by the end of the century it became fully international. Throughout the 20th century the postal service was a basic need for commerce and for general communication. To ensure this service was available to all, and at a reasonable cost, the governments often made the national postal service a monopoly.
Technological change has upended this. The rise and ubiquity of e-mail and other digital messaging services has replaced the postal service as the preferred means of communication for businesses and individuals. The proportion of general communications that are delivered by the postal service is now very small. As a result, the national postal service in Canada is now losing money to the tune of over $1 billion a year.
Utilities, like NOTL Hydro, are some of the last large users of the postal service. Because of the monopoly, and because are bills are unique to each customer so must be addressed, we are required to use the postal service. We can use e-billing, if a customer agrees to it, but we cannot use an alternative form of paper delivery.
Like all utilities, NOTL Hydro has been trying to convert customers to e-billing. Currently, about 30% of our customers are on e-billing. We recently donated a little over $3k to Community Care as the result of switching customers who were getting both paper and electronic bills to just e-bills. Until the end of this year, we will be donating $10 to Newark Neighbours for every customer that converts to e-billing. Newark Neighbours is our partner in the annual Food & Toy Drive. We will also be more aggressive in the promotion of this e-billing option.
The recent move by the Federal Government to cut costs and the reaction of the union to try protect jobs are both natural steps in a declining business. This process of higher prices, lower services and fewer jobs will continue until there is very little of either the business or jobs left. No matter what, the final result is inevitable.
There is a better way for Canada. Be bolder and remove the monopoly to allow competitive forces to shape the future of delivery services in Canada. This will create jobs and will allow innovation to create better and cheaper alternatives for Canadian customers. For example, there may be cheaper way than Canada Post for NOTL Hydro to deliver our paper bills to our customers given they all go out at the same time and go to most addresses in Niagara-on-the-Lake.
I recognize that this will not be that simple.
- The union will want to protect the union jobs as much as possible which will make the process messy.
- There will be some services, like to remote areas, that the government will want to continue in a subsidized manner if there are no competitive alternatives.
- A competitive environment will be challenging for some customers to manage.
- The existing assets of Canada Post will have to be managed in a manner that maximizes their value in a customer-friendly way.
I also recognize that the manager of one monopoly calling for another monopoly to be removed may seem a bit rich. However, I believe this is the best way forward for continued affordable postal delivery services in Canada. Otherwise, we are doomed to higher costs and more strikes.