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Michael Taube: Canada Post’s $1.6B loss proves it’s time to privatize

The Crown corporation is effectively bankrupt and stuck in the past. Only privatization and real competition can solve this problem

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Just when you think that Canada Post couldn’t sink any lower into the financial abyss, the once-venerable Crown Corporation has set another record for futility and failure.

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Canada Post recently reported a loss of $1.57 billion (before tax) for the 2025 fiscal year. This number was so staggering that even CBC News felt compelled to point out “it’s yet another blow to the Crown corporation that’s already drowning in debt so badly that it’s surviving on $2 billion worth of federal loans to stay afloat.”

Michael Taube: Canada Post’s $1.6B loss proves it’s time to privatize Back to video

This includes a $1.034 billion repayable loan the federal Liberals issued to Canada Post in January 2025. The belief at the time was that it could help sustain the operation as it faced “significant financial challenges.” Alas, this was nothing more than a pipe dream. As a devastating May 15, 2025 report by the Industrial Inquiry Commission suggested, Canada Post was facing an “existential crisis.” It was already “effectively insolvent, or bankrupt” and if immediate action wasn’t taken, “its fiscal situation will continue to deteriorate.”

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What does Canada Post plan to do? A recent news release stated “the severity of the corporation’s financial situation underscores the urgency to transform and meet the modern needs of the country.” But if you think about it, Canada Post’s long-standing inability (and, in some instances, refusal) to take the necessary steps to transform and modernize their organization put them in this messy situation.

Many Canadians aren’t using physical mail as much and prefer quicker methods of communication including email, direct messaging and texting. The cost of a physical stamp for a domestic letter increased to $1.44 this year. Multiple strikes by the Canadian Union of Postal Workers have also frustrated our communities.

Even if Canada’s reliance on physical mail has decreased, we can’t completely avoid sending out letters, envelopes and packages. We need competitive rates for postage stamps and overnight courier services. We need cost-cutting measures to reduce wasteful spending. We need fiscally sound strategies for rural delivery, super mailboxes and more.

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Enough is enough. It’s time for Ottawa to bite the bullet and privatize Canada Post. What’s the best way to do it? Lysander Spooner’s innovative experiment with a privately-run post office could serve as inspiration.

Spooner was a unique and fascinating figure during the 19th century. He was a true jack-of-all trades: lawyer, political thinker, abolitionist and writer. He strongly believed in libertarianism, anarchism and, as strange as it may sound to some ears, free market socialism.

His most noteworthy endeavour was when he established the American Letter Mail Company in 1844. It served as a direct competitor to the monopolistic United States Post Office. As he outlined in The Unconstitutionality of the Laws of Congress, Prohibiting Private Mails, the “power given to Congress, is simply ‘to establish post-offices and post roads’ of their own, not to forbid similar establishments by the States or people.”

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Spooner established offices in large cities including New York, Boston, Baltimore and Philadelphia. He offered significantly lower rates for postage stamps. He hired agents to travel with the mail by train and boat, who would pass them on to messengers to deliver them. The American Letter Mail Company was popular and profitable in its early years, according to most historical accounts.

The U.S. government was displeased with Spooner’s progress and launched an all-out attack to bring his company down. Stamp rates for the Post Office were reduced from 18 3/4 cents (typical cost of mailing a letter from Boston to New York) and 25 cents (Boston to Washington, D.C.) to 12 cents. What did Spooner do? He remained undeterred and adjusted his business model to appeal to an even wider customer base. His rates, which were 6 1/4 cents for postage per half-ounce and 20 stamps for a dollar, were lowered and free local delivery was introduced.

This led to a high-profile legal case. While the U.S. Circuit Court initially sided with Spooner and questioned the legitimacy of a government monopoly for mail delivery, he ultimately lost the war. “In 1851, Congress again lowered rates and simultaneously enacted a law to protect the government’s monopoly on the distribution of mail,” Lucille Goodyear wrote in American Legion Magazine. “Whereas threats of jail had not fazed or dampened Spooner’s zeal in the fight, the latter move by Congress forced him into defeat.”

Spooner’s experiment may have been short-lived, but it accomplished a great deal. The American Letter Mail Company successfully competed against the Post Office by offering affordable stamp rates, efficient services and freedom of choice for consumers.

Canada Post could utilize aspects of the Spooner model if it were privatized.

Instead of begging for government handouts and placating out-of-touch union workers, Canada Post should entice customers with a more affordable and viable model for stamps, letters, packages and courier services through Purolator. Competition in the mail industry should also be encouraged by Ottawa to create competitive pricing and different market rates for physical mail options. Even if a privatized Canada Post faced no competition in the interim, it still needs to think and act like a real business when it comes to pricing, budgets, advertising and annual revenue.

Canada Post cannot continue in its present form. It has become too inefficient, lost too much money and is too stuck in its old ways. Privatization is the solution, and Spooner’s American Letter Mail Company experiment is the perfect antidote.

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