The Privatization Of Royal Mail Canada

Royal Mail Canada was founded in 1867 and was originally a branch of the Canadian Government. In the 1960’s the name of the government post office department changed to The Canada Post Corporation. Twenty years later, in late 1981 Canada Post separated from the government and became a Crown Corporation. A Crown Corporation is “Any corporation that is established and regulated by a country's state or government. This is the opposite of private companies, which are privately owned, structured and operated to serve the owners of the company. A crown company is commercially owned by the government.” Due to the rising demand for electronic communications technology the demand for letter mail has declined drastically. In the past ten years “the volume …show more content…
The idea would save the government $500 million but would also bring many opportunity costs with it. The complete removal of door-to-door mail delivery would leave Canadian citizens with disabilities in its wake. On the other end of the spectrum Canadians who regularly use the postal service provided by Canada Post are strongly against the idea of the privatization of the Crown Company due to the fact that after the shares reach the market the prices will rise significantly and due to the postal monopoly in Canada the inelasticity will cost Canadians hundreds of thousands of dollars due to price …show more content…
I don’t believe that Canada Post should become a privatized entity because it being sold to shareholders and companies will not change the current structural issues of the company, because the new management would want to continue on the company business models current path. One solution to keeping the postal service profitable in Canada would be to eliminate the monopoly present the postal system. For example, New Zealand after removing the postal monopoly within the country saw that the rate of mail being received on time grew from 88 percent to 97 percent in less than a year. Legalizing postal competition in Canada would create a more competitive market for mail delivery and companies would have to change their models to become more profitable. The supply of service for postal companies would rise due to a competitive market which in turn would cause a rise in the elasticity of letter mail driving the demand up because Canadians would have more carrier choices for mail meaning that the competing companies would have to maximize their profits by expanding area of operation, lowering costs etc. which could prove beneficial to Canadians who wish to use postal services at a cheaper more efficient rate. Another solution would be the reduction of deficits through the replacement of door-to-door delivery. If the CPC and the Canadian Government were to eliminate door-to-door delivery they could save an