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