Thank you very much, Mr. Chair.
First, I'll give my disclosures to the honourable members. Number one, I don't belong to or donate money to any political party or display any lawn signs.
Second, I completed my 850-page Ph.D. thesis in 1989 on Canada Post, using every annual report of the then post office department, Hansard from 1820 to 1981, as well as the public archives on Wellington Street.
Third, I completed my 2015 MLI study based exclusively on every annual report of Canada Post from 2000 to 2015, the annual CRTC media monitoring stats reports and the annual Payments Canada stats reports.
Fourth, I completed the 2024 study, “Canada Post: The Tipping Point Has Arrived”, using the same government sources and audits, but updated to 2024.
My final disclosure is that for 35 years, I've taught the strategy capstone course researching the competitiveness of firms and industries in Canada and the United States.
Before summarizing my empirical research over the past 25 years, I want to briefly mention the single most important analysis I've ever read concerning communications technology and policy, because it goes to the very core of all the issues you're discussing.
In 1995, MIT engineering prof Nicholas Negroponte, co-founder of Wired magazine and the very famous MIT Media Lab, wrote Being Digital. He argued that all of existence is composed of either atoms or electrons. Human bodies—mine and yours—and indeed any physical object, including trucks, planes and trains, are made of atoms, which have mass and weight. Einstein's laws of relativity limit the speed at which atoms can travel—i.e., very slowly. By contrast, any information that is digitized is composed of electrons, which have no mass and no weight. This means that electrons travel at the speed of electricity, which is almost the speed of light—300,000 kilometres per second.
From these principles of physics, Negroponte concluded that electrons everywhere in the world will always trump atoms in the realm of communications. From this, Negroponte predicted in 1995, astonishingly, the complete digital deconstruction of every western society over the next third of a century for everything informational, from post offices to newspapers to broadcasting to publishing to education to entertainment to banking to government to payments systems and to health care. He was absolutely correct, before any other person in the world.
My 2015 study of the audited annual reports of CPC revealed that the Negroponte trend started in Canada in 2006, with a steep decline of letters every year, without exception. My 2024 report brought the numbers up to date, showing the very same report with no exception. There were declines every year.
In the core business, you've already heard that the numbers declined from 5.5 billion to two billion pieces. However, some do not understand that these numbers continue to collapse going forward. Indeed, letter mail will mostly, I predict, disappear within 10 years, as the remaining small businesses that still use mail will digitize their value chains due to the Negropontian logic. Those few remaining elderly who still write letters will, sadly, die.
The second core business of parcels is very different, because e-commerce increases by 9% a year. However, during and after the pandemic, CPC lost over half its market share in parcels due to the entry of the gigs. In my 2024 report, I provided estimates of average operating costs for truck, driver and fuel. It's about $65 an hour for CPC, about $45 an hour for the big private contractor couriers and about $25 an hour for the gigs. Now you can understand why CPC is collapsing in parcels.
As the CEO and CFO stated in 2024, the current architecture is not sustainable with this decline. As I have stated for the last five years, long before Kaplan did, CPC was and is insolvent. It's unable to pay its bills as they become due. This is why the government provided a $1-billion bailout and will have to again and again—bigger and bigger—until it's restructured.
There are critics, probably in this room, who state that this doesn't matter, as it's an essential service. I argue that this is an error that assumes precisely what is being debated, because, first, CPC is not a going concern. It exists only because the government is saving it by a bailout.
Second, the alleged essential services provided are not essential. This is supported by the radical decline in usage by more and more people every year using the post office less and less. If it was essential, we wouldn't stop using the post office.
Third, it is argued that CPC doesn't need to make a profit; it's not different from National Defence. This is a false analogy, because defence is a pure public good that benefits everyone and is not divisible, whereas Canada Post delivers a private good that is divisible into discrete units: We call them letters with stamps.
In conclusion, this is not an argument to shut down or privatize the post office. However, it must be radically restructured to a much smaller entity—maybe 15,000, or maybe 20,000. I don't have the internal data from Canada Post that services those citizens most in need—approximately 15% of Canadians, which StatsCan estimates precisely at 5.9 million Canadians, and the rural and remote communities where there are no private alternatives.
Thank you very much.
