Why is government delivering Canada’s mail?

Research outlines rationale for scrapping public ownership of many Crown corporations, including Canada Post

In a paper published today by The School of Public Policy, Professors Edward Iacobucci and Michael Trebilcock identify Canada Post as a front-runner for privatization.

The authors contend that state-owned enterprises are not necessary in some circumstances.  An obvious case for full privatization is in the case of postal delivery in Canada.

“The economic case is clear: there are no apparent market failures in mail delivery that invite state ownership, and comparative experience with privatizing the mail system suggests potential for service and cost improvements,” the authors argue.

However, the authors concede that the idea of privatizing Canada Post is contentious thanks to arguments by those “who have a clear political agenda” like the Canadian Union of Postal Workers.

In some other cases, partial privatization should be considered such as the Export Development Corporation and the Business Development Bank of Canada.

Iacobucci and Trebilcock highlight several alternatives to full-scale state ownership as means for regulating industry. These include regulation through governmental departments and agencies, self-regulation, taxes and subsidies.

“In many cases, focused government intervention in a privatized market will accomplish the same goals as public ownership, but at a much lower cost,” the authors write.

The study can be found online here.