Last December, my father-in-law sent Christmas cards to my sons, who live with me in Virginia. They received them at the end of January, after more than a month of waiting anxiously. My family members weren’t the only ones who experienced this delay: millions of Canadians nationwide watched their holiday mail languish in a postal limbo as Canada Post’s 32-day strike soured the season’s cheer. I’ve covered the mail service’s mounting troubles since 2011, so I wasn’t entirely shocked when the federal government offered Canada Post a staggering financial bailout—of more than $1 billion—back in January. The move signalled both the depth of our postal system’s woes and the urgent need for it to adapt to a fast-evolving parcel market. Now, with their collective agreement set to expire on May 22, postal workers are poised to strike again, upping the urgency of a permanent fix even more.

As communication shifted to texts and emails, and shipping services like Amazon have grown in popularity, Canada Post’s mail volumes have gradually declined—from 9.7 billion pieces of mail shipped in 2012 to 6.5 billion pieces in 2023. There’s an immense temptation to say that these factors explain all of the Post’s problems, but don’t give in. They’re only symptoms of the underlying issue: the incentives inherent to a publicly owned corporation with no competition for most of its products. If taxpayers can bail out Canada Post, why would it control costs? If you have a monopoly, why not pass out costs to consumers in the form of higher prices? After all, they can’t go elsewhere.

This dynamic perfectly explains the history of Canada Post before and since it was transformed from a government department to a Crown corporation in the early 1980s. In the late ’70s, the Post Office Department—as it was then known—was running significant deficits and outdated infrastructure. Turning it into a Crown corporation was seen as a way to bring more business-like principles to its operations and help reduce costs. This didn’t happen, however: almost immediately, stamp prices increased steeply, from 17 cents to 30 cents, and since then, Canada Post has consistently increased prices........

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