Blacklock's Reporter

Cabinet is being pressed to release confidential Canada Post feasibility studies on retail banking that were mysteriously shelved by management, and now concealed from the public. Toronto City Council voted 39-2 to request that the post office divulge Banking: A Proven Diversification Strategy, a secret report that concluded postal banking “would be a win-win strategy”.

“If there are feasibility reports on diversifying Canada Post revenues, can the government not reopen that discussion?” said Councillor Kristyn Wong-Tam, sponsor of the proposal; “This issue of Canada Post services has become a lightning rod for communities.”

The existence of the report was only learned through the release of files under the Access to Information Act. The documents cited board meetings, polling results and focus group data indicating post executives spent four years researching the benefits of establishing the largest retail banking network in the country. Of 811 pages in the file 701 were censored due to commercial confidentiality, Canada Post said. The records are dated between 2009 and 2013.

Canada Post appeared to kill the program in late 2013 and opt instead for 35% rate increases this year, and the elimination of all home mail delivery to five million households nationwide. MPs and the Canadian Union of Postal Workers have speculated cabinet ordered management at the Crown corporation to abandon its banking proposal.

“There is a strong consensus that if we lose these services the effects will be detrimental,” said Councillor Wong-Tam. “What is the financial and social impact? This is a service people need. It really comes down to the impact on residents, and people are starting to become angry.”

The text of the Council amendment reads: “That City Council request the federal government and Canada Post to publicly release the report Banking: A Proven Diversification Strategy; that City Council direct the City Manager, in consultation with the appropriate City staff, to report back to Council through the Executive Committee on a) the potential cost of the reduced Canada Post service to the City including the requirement of municipal land and rights-of way, infrastructure such as paving and lighting and policing related to vandalism, graffiti and mail theft; b) which communities and neighbourhoods in the city will be affected; c) the demographics of such areas; d) what change to service will be implemented in these areas where postal boxes will be located; e) the impact of these changes on the public realm.”

Toronto joins a list of cities to protest the service cuts, from Sault Ste. Marie, Ont. to Medicine Hat, Alta., New Westminster, B.C. and Vancouver, where councillors voted unanimously to register their opposition with the Federation of Canadian Municipalities.

“The decision to eliminate door-to-door mail delivery in urban areas will affect many municipalities,” said Mayor Claude Dauphin of Lachine, Que., the federation’s president. “Canada Post must work with municipalities to make sure the concerns of cities and municipalities are addressed.”

The post office has publicly denied any interest in reviving the Postal Savings Banks it operated nationwide till 1968. “As for banking, it is not our core business,” Canada Post spokesperson Jon Hamilton told Blacklock’s January 2; “It would require a huge investment to serve a niche market.”

However confidential documents reveal that management drafted a “vision for Canada Post financial services”, noting that profit margins in domestic banking averaged 20.5 percent, and as much as 33% at online banks like ING Canada.  The corporation has 6519 post offices, a wider branch network than the Royal Bank, the largest of the federally-chartered banks.

By Tom Korski

Imperial Oil pays less tax today than it did in 1960. Bus drivers pay more. In this statistic we see the case for Inequality and the Fading of Redistributive Politics.

Editors and contributors from leading universities document the phenomenon with scientific precision. Canada’s rich are definitely richer, the poor are not really much poorer, but recent years have put the middle class in a vise-like squeeze. In response Parliament passed a bill offering tax credits for hot tubs. “This new political landscape has sharp edges,” write editors Prof. Keith Banting of Queen’s University, and Prof. John Myles of the University of Toronto.

Inequality is neither hectoring nor conspiracy-ridden. “There is no smoking gun to be found,” the editors note. However the result is the same: “Canadians in the middle, especially those in the lower middle of the wage distribution, have been struggling in the wake of economic change and have not received their fair share of the benefits of economic growth for a generation.”

No federal cabinet in twenty years has done much to alter the trend lines. It has been a generation of cheese-paring “dominated by the Department of Finance and characterized by cost containment through technical, almost invisible program adjustments”, writes Prof. Susan Phillips of Carleton University’s School of Public Policy.

An example: the 1944 baby bonus introduced as the first truly universal family benefit, and now reduced to a non-refundable tax credit.  The mangling of the bonus reads like a round of the telephone game: first they renamed it the “family allowance”, then clawed it back in 1989. It was renamed again as the Child Tax Benefit in 1993, then replaced with a Child Tax Benefit in 1998 that actually cut benefits for low-income families. This was followed by a Universal Child Care Benefit, and finally in 2007 the non-refundable Child Tax Credit.

The effect is “perverse”, writes Prof. David Good of the University of Victoria, a former assistant deputy minister: “Non-poor families receive $300 per child, including the very rich; some low-income families receive a smaller amount; and the poorest get nothing at all because they do not owe income tax.”

Inequality reflects the sunset on Canada’s postwar middle-class. It is a fact now that most people under 50 will never know a time when a high-school education could bring a good wage; or one wage-earner might support a whole family.

It was nice while it lasted.

By Holly Doan

Inequality and the Fading of Redistributive Politics, edited by Keith Banting and John Myles; UBC Press; 480 pages; ISBN 9780-7748-26006; $34.95