Monopoly and the Mandate of Canada Post

Abstract

Mail delivery is one of the few economic activities that has avoided the wave of deregulation and privatization that has swept network industries over the past two decades. Nonetheless, postal services throughout the world are receiving critical reexamination, not only because of the technological developments that appear to be changing the essential character of communications, but also because of a growing body of experience and scholarly research concerning the regulation and public ownership of enterprise. Such experience and research now provides policymakers with a better understanding than they had a generation or more ago of the costs and benefits of the existing way in which postal services are produced. This Article builds on that experience and research by examining the following questions concerning the business activities of Canada Post Corporation (Canada Post) in a competitive environment: What should be the appropriate mandate of Canada Post? In particular, is Canada Post a natural monopoly and, if so, what form of regulation would best serve Canadian consumers? If the delivery of letter mail is not a natural monopoly, what basis exists for retaining Canada Post's current statutory monopoly? What potential exists for Canada Post to abuse its statutory monopoly-and other statutory privileges and immunities - to compete unfairly against efficient private suppliers of postal services?