Open-Minded On Post Banks

Canada Post is “very open-minded” on reviving retail banking services, the newly-appointed chair of the board yesterday told the Commons committee on government operations. Jessica McDonald said she will consider releasing a redacted 811-page analysis obtained by Blacklock’s in 2014 that rated postal banks a “win-win” for the corporation.

“Postal banking has been under a tremendous amount of discussion and continues to be,” said McDonald; “While postal banking is not a specific part of my mandate letter, I do think it’s important to note Canada Post does provide some financial services, and I think we need to be very open-minded.”

Canada Post currently has a money transfer service and sells a version of certified cheques. The post office for a century took retail deposits until the service was closed amid protests from banks and credit unions.

Public Services Minister Carla Qualtrough in a January 24 mandate letter urged the Canada Post board to consider “best practices and successful innovations in other countries”, but made no mention of reviving postal banks disbanded in 1968. Access To Information records indicated management studied retail banking from 2009 to 2013.

“This would be a win-win strategy,” read one report Banking: A Proven Diversification Strategy. The corporation has never released an uncensored copy of its banking files that cited average profits of 20.5 percent a year by online banks like ING, PC Financial Inc. and Canadian Tire Bank.

“The study Canada Post did on banking, when will that be made public?” asked MP Brian Masse (Windsor West, Ont.), New Democrat industry critic. “Why has it not been made public? Those are some of the potential solutions out there. We need to see if there is really some value there.”

“I have asked for that report to be looked at again,” replied Chair McDonald; “I have asked for new advice about the content of the report.”

“I do think it’s important in all of these conversations to be open and transparent,” said McDonald; “I would like to focus personally on new conversations about enhanced services.”

McDonald, a former CEO of British Columbia Hydro, was appointed chair of the post office last December 12. McDonald yesterday told the committee:

  • • a new Corporate Plan on Canada Post services will be finalized next year;
  • • alternate-day delivery of letter mail “is all part of the strategic analysis”;
  • • the corporation will name a new CEO “in the very near term”;
  • • new appointees will be named to the board “in the coming days”;
  • • Canada Post will report its fourth consecutive profit in a pending 2017 Annual Report.

“We now have several years of positive financial results,” said McDonald. “This does give breathing space to the corporation to find the path to move forward.”

“Given that we do have positive financial results over the past few years, that trend is expected to continue,” said McDonald. “For how long?” asked Conservative MP Kelly McCauley (Edmonton West). McDonald did not reply.

Canada Post in 2016 reported a $55 million net pre-tax profit despite the $110 million cost of a threatened lock-out of the Canadian Union of Postal Workers. Previous profits were $63 million in 2015, and $194 million in 2014.

By Tom Korski

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