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What to do with Canada Post?

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http://www.theglobeandmail.com/report-on-business/cash-strapped-canada-post-asks-government-for-a-cheque-in-the-mail/article13989680/

Canada Post has long had a troubled business model as Canadians continue to shun conventional mail in favour of e-mail, social networks and other forms of digital communication.

Now its also grappling with a serious cash crunch.

The federal Crown corporation warned ominously Tuesday that it will likely run out of money by next summer if it continues on its current path. We have a 19th century business model that we have to pull into the 21st century, Canada Post spokesman Jon Hamilton said.

Canada Post said it is in talks with the federal government about securing unspecified additional financing. Its also appealing to regulators for some relief from the source of one of its biggest financial problems: a large, and underfunded, employee pension plan. The company has a $1.1-billion payment due in 2014 to cover a massive solvency deficit in the fund nearly $6-billion at the end of 2012.

The company said its cash woes would increase rapidly in the second half of next year.

Longer term, Canada Post is floating several cost-cutting measure that could prove distasteful to many Canadians, including moving to every-other-day mail delivery, shifting people from home delivery to community mailboxes, closing more post offices and raising postal rates.

First of all there's NO WAY! you need daily delivery. Even if you're one of those people that don't want your bills e-mailed to you, it's not like you need daily delivery to receive bills.

I still get mail from family, I still like the coupons I get from certain companies. Sending out actual invitations for weddings are still a thing. . . I guess. But I almost never mail things. I still have stamps purchased for when I got married.

The problem with Canada Post is, like with all public sector businesses, it's beholden to a powerful union with lavish pensions that making trimming costs very difficult. If it cuts delivery days then there's no reason they need the staff, but then there's no way they could fund their pensions. It's a similar problem with all public servants. They want to cut staff then the Union talks about getting rid of "Good Canadian Jobs". Same crap the LCBO Union trotted out when it tried to make people think stock clerks need to get paid $20/hour.

BTW raising postal rates won't exactly make people more likely to mail things.

Edited by Boges

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First of all, not every Canadian has a computer and for those who do, there's always a chance of your computer going down for a period of time before one can get it fixed. I think Canada Post will probably get sold off to the private sector with some conditions.

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First of all, not every Canadian has a computer and for those who do, there's always a chance of your computer going down for a period of time before one can get it fixed. I think Canada Post will probably get sold off to the private sector with some conditions.

I'm sure not everyone does have access to a computer. But you still have access to a computer with the internet at public libraries etc. I'm hearing people starting to say that internet is a universal human right.

Still doesn't justify daily mail delivery.

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First of all there's NO WAY! you need daily delivery.

I think you hit the nail right on the head with this. I have to go to a communal mail box to gather our mail and I honestly do it once or twice a week. The mail at my company gets added to a pile which also gets checked once a week. Perhaps larger businesses need more frequency but the reality is that residential services could easily go to 2-3 day per week service and not miss a beat.

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Lavish pensions, eh? Postal Workers driving around in Bentleys upon retirement? Sipping Champagne? Eating caviar?

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Lavish pensions, eh? Postal Workers driving around in Bentleys upon retirement? Sipping Champagne? Eating caviar?

At this point any pension is considered lavish. The point remains, the pension is one of the big reasons they're bleeding money.

When do Posties get to retire?

Edited by Boges

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At this point any pension is considered lavish.

Pensions are only considered lavish because you choose to believe that. Companies have convinced you that they shouldn't have to look after their people. When employees have to make up the shortfall in their pensions, they are effectively taking a pay cut. When companies (not particularly Canada Post, but the private sector) don't look after their people, they're effectively downloading those costs of doing business to the government. The federal government isn't going to let little old ladies live on cat food. They're going to take money out of other programs or raise taxes to make up for the pensions that companies decided they no longer had to pay. Paying your employees is a cost of doing business. If you can't afford employees, you can't afford to do business. It's as simple as that.

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Any pensions are lavish. Unbelievable that we have so much disrespect for our labour force, but in particular the elderly.

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The Pension only really works if you work for the same employer for decades. That doesn't seem to be happening anymore.

Pension are nice but the reality simply is, they aren't being offered anymore. Only civil servants and auto workers get them now. People should be saving for their retirement.

I'll be interesting to see what happens when a generation of people that didn't save and don't have pensions reach retirement age. And by interesting, I sorta mean worrisome as I'm part of that generation.

Besides the point of the thread. Canada Post can't afford it's workforce and pension anymore, what should be done? Should the government just maintain it's workforce so it can fund its pension?

Edited by Boges

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Mail delivery is run by the government because it's expected that it would lose money otherwise. They're not supposed to be operating at a profit. It's the government's responsibility to fund it accordingly. Personally, I don't think mail delivery should be run for profit. I think it should be publicly owned and funded for the important purpose that it serves. You can't expect a private entity to deliver to remote areas where it will lose money, but as Canadians, those people that live in remote areas should have access to mail delivery. Frankly, I think telecomm should be a public service too because of the good that it does for business and individuals, allowing them to communicate with each other, just like mail delivery. So what do you do about CP losing money? Nothing. Keep funding it and fire the executives if you believe they're not doing an adequate job ensuring that it's running optimally between efficiency and maximum service.

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And pensions are not a luxury. They're a necessity. Which is why government employees should be covered accordingly. The government's going to end up paying for them one way or another.

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lavish pensions

Lavish?

And you argue that we need to get rid of pensions because only civil servants and autoworkers get them? Everyone gets one (CPP), every loyal employee who spends their life building company profits deserves a pension for that work.

All we have done in the last recent history is download responsibility from the employer to the employee without paying the employee a cent more. It's sickening.

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Mail delivery is run by the government because it's expected that it would lose money otherwise. They're not supposed to be operating at a profit. It's the government's responsibility to fund it accordingly. Personally, I don't think mail delivery should be run for profit. I think it should be publicly owned and funded for the important purpose that it serves. You can't expect a private entity to deliver to remote areas where it will lose money, but as Canadians, those people that live in remote areas should have access to mail delivery. Frankly, I think telecomm should be a public service too because of the good that it does for business and individuals, allowing them to communicate with each other, just like mail delivery. So what do you do about CP losing money? Nothing. Keep funding it and fire the executives if you believe they're not doing an adequate job ensuring that it's running optimally between efficiency and maximum service.

So you really think Canada Post needs to be funded at the same level it does now, no matter what?

Do you really think 5-day a week service is good use of taxpayer money when less people are using the service?

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Lavish?

And you argue that we need to get rid of pensions because only civil servants and autoworkers get them? Everyone gets one (CPP), every loyal employee who spends their life building company profits deserves a pension for that work.

All we have done in the last recent history is download responsibility from the employer to the employee without paying the employee a cent more. It's sickening.

Fine but CP can't afford it's pension plan right now. If they reduce services, which they need to do, they probably won't be able to meet the obligations of their pension. Should the taxpayer be on the hook for those pensions?

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All we have done in the last recent history is download responsibility from the employer to the employee without paying the employee a cent more. It's sickening.

And the fact of the matter is that the employees can't afford to make up the shortfall, since they haven't been paid a penny more. The biggest problem right now, imo, is that credit is masking the true severity of the problem. The economy doesn't react to the labourforce getting screwed because people are living on credit. Imagine what the price of houses or cars would be if you had to pay cash. Imagine what kind of wages and benefits people would be demanding if credit cards didn't exist. Meanwhile, researchers and economists use GDP and other meta-indicators to understand how people are doing. Not taking into account people can and do continue to buy things on credit despite not having the money.

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Do you really think 5-day a week service is good use of taxpayer money when less people are using the service?

I'm open to the idea of more limited service, but bear in mind that this means getting rid of full-time jobs and the effect that will have on the economy. It's not a zero-sum game, so it's a lot more complicated than just cutting people down to part-time. Sure they're going to save money, but then the government is also going to lose revenues from the reduction in income from employees. Also, will it be limited year round? What about the busy season around the holidays when they're delivering even on weekends? There's a lot of things to consider outside of just saying they can't afford it so cut it back. Perhaps there are other ways CP can increase its revenues to make up for the shortfall. Perhaps there are other efficiencies to be found. Whatever.

Edited by cybercoma

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The irony of public pensions is they invest in big corporations and demand profits. The Ontario Teachers Pension plan used to own the Toronto Maple Leafs.

So it's slightly hypocritical to rail on greedy corporations while their profits go to funding pensions.

Edited by Boges

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Of course corporations should be profitable. Nobody is arguing otherwise. That's a strawman. Actually, it's more like a false dichotomy fallacy. There's no such choice as "either a corporation is profitable or it pays its employees well." A corporation can and should be both profitable and treat its employees well.

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Mail delivery is run by the government because it's expected that it would lose money otherwise. They're not supposed to be operating at a profit. It's the government's responsibility to fund it accordingly. Personally, I don't think mail delivery should be run for profit. I think it should be publicly owned and funded for the important purpose that it serves. You can't expect a private entity to deliver to remote areas where it will lose money, but as Canadians, those people that live in remote areas should have access to mail delivery. Frankly, I think telecomm should be a public service too because of the good that it does for business and individuals, allowing them to communicate with each other, just like mail delivery. So what do you do about CP losing money? Nothing. Keep funding it and fire the executives if you believe they're not doing an adequate job ensuring that it's running optimally between efficiency and maximum service.

And pensions are not a luxury. They're a necessity. Which is why government employees should be covered accordingly. The government's going to end up paying for them one way or another.

Then they should pay for them not me. A buddy of mine just retired and he said he was part time for a long time but was able to buy his pension back dirt cheap, for the years he was part time. Now do you know what he means ? And another friens got a job with them and she actually said she was a little embarressed by the amount she was making and what LITTLE work they do, but she said she goy use to it.

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Of course corporations should be profitable. Nobody is arguing otherwise. That's a strawman. Actually, it's more like a false dichotomy fallacy. There's no such choice as "either a corporation is profitable or it pays its employees well." A corporation can and should be both profitable and treat its employees well.

And give them indexed pensions? You can think that but it's not happening.

As for the argument about good jobs. Only the government feels the need to maintain service levels of departments even though the work isn't there. "If we lay them off, it'll hurt the economy"

So even though the LCBO is an inefficient monopoly, we have to keep it because it offers well-paying jobs? Even though no one mails stuff anymore we have to keep CP at it's same staff levels because those people are unemployable and will just go on welfare?

Those civil servants are a net cost to the economy because the ever growing government needs to keep hitting up taxpayers for more money to fund generous jobs that are no longer needed.

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At this point any pension is considered lavish. The point remains, the pension is one of the big reasons they're bleeding money.

What you are talking about is bad management. A pension liability only becomes underfunded when you, well, underfund it. The company signs a legal agreement with its workers, it knows it has an obligation, and yet it doesn't put the money in it needs to. How can you call that anything other than bad management? This isn't something which just happened overnight. They've been underfunding their pension plan for many years now. Why? Simple. Because management performance bonuses are not triggered by paying bills but by making profits. And obviously, you make more profits if you don't pay your bills.

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Now businesses are paid by check in many cases and why should they have to wait longer to get there money. And then there is the story just a week ago, that a eldery lady can't get her mail delivered because her step is 14 inches high, and the posties only do 13. It is no different then any other lazy ass union government outfit.

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The irony of public pensions is they invest in big corporations and demand profits. The Ontario Teachers Pension plan used to own the Toronto Maple Leafs.

So it's slightly hypocritical to rail on greedy corporations while their profits go to funding pensions.

Yeah and the OTP is a healthy, robust pension plan that provides for its membership. It's actually a good model for others to follow.

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Then they should pay for them not me. A buddy of mine just retired and he said he was part time for a long time but was able to buy his pension back dirt cheap, for the years he was part time. Now do you know what he means ? And another friens got a job with them and she actually said she was a little embarressed by the amount she was making and what LITTLE work they do, but she said she goy use to it.

It means you think anecdotes apply to everyone. That's what it means.

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And give them indexed pensions? You can think that but it's not happening.

As for the argument about good jobs. Only the government feels the need to maintain service levels of departments even though the work isn't there. "If we lay them off, it'll hurt the economy"

So even though the LCBO is an inefficient monopoly, we have to keep it because it offers well-paying jobs? Even though no one mails stuff anymore we have to keep CP at it's same staff levels because those people are unemployable and will just go on welfare?

Those civil servants are a net cost to the economy because the ever growing government needs to keep hitting up taxpayers for more money to fund generous jobs that are no longer needed.

The LCBO is stupid, but that's another discussion. The entire thing should be eliminated and so should the other provincial booze boards.

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