When we talk of the productivity challenges facing Canada, government inaction is only one of the many pertinent issues. The crisis caused by U.S. President Donald Trump’s attacks on Canadian sovereignty has finally spurred the federal and provincial governments to tackle interprovincial trade barriers and reap the productivity benefits of unfettered domestic trade. But why does it take an emergency for our governments to act?
The recent turmoil involving Canada Post is reflective of how our focus on short-term concerns (short-termism), our inability to make tough decisions, and inertia are costing Canadians billions.
A missed chance to modernize Canada Post
In 2013, Canada Post unveiled a bold five-point action plan to modernize its operations and ensure long-term financial sustainability. As the CEO at the time stated repeatedly, Canada Post had shifted from being a company that delivers mail with packages on the side to a company that delivers packages with mail on the side.
In its most recent annual report, Canada Post reported that letter mail volumes declined from 5.5 billion pieces in 2006 to two billion in 2024. And as its revenue drops, the cost of delivering mail keeps going up. Population growth means that Canada Post must serve a growing number of addresses each year. In 2024, there were 17.6 million addresses, up from 14.3 million in 2006. During this same period, Canadian households saw the average number of letters received per week decrease from seven to two.
Carney’s “nation-building” is nothing but a blast from the past
These trends were very clear to anyone who took an objective look even back in 2013. To adjust to the new realities of the digital economy and a shifting competitive landscape, significant changes were required in the way Canada Post operated. The 2013 plan included measures such as phasing out door-to-door delivery in favour of community mailboxes, streamlining operations, and embracing digital transformation. It was a forward-looking strategy designed to address the structural challenges facing the postal service in an increasingly digital world.
The cost of political short-termism
However, shortly after the plan was announced, the newly elected Trudeau government halted its implementation. The rationale was political, with concerns over perceived public backlash and union pushback. This decision had significant economic consequences in subsequent years. A look through annual reports shows Canada Post lost $3.8 billion between 2018 and 2024, money that could have been reinvested in innovation, infrastructure, or to pay down our national debt. On top of this, the federal government loaned Canada Post $1 billion earlier this year so it can keep operating.
Ironically, the Carney government is now implementing many elements of the 2013 plan. Community mailboxes are being rolled out and operational efficiencies are being pursued. But the damage has been done; billions of dollars have been lost and the opportunity to lead in postal innovation has passed us by.
Canada Post is just one of countless examples of how political short-termism can undermine long-term economic health. Interprovincial trade is another issue where political considerations have overridden economic logic. We talk endlessly about innovation, competitiveness, and the need to prepare for the future, but we often fail to act when it matters most.
The urgent need for long-term decisions
As we face mounting fiscal pressures, aging infrastructure, and a rapidly changing global economy, Canada must find the courage to make difficult decisions. That means supporting reforms that may be unpopular in the short term but are essential for long-term prosperity. It means trusting our public institutions when they present well-researched plans for modernization. And it means recognizing that the cost of inaction is often far greater than the cost of change.
Canada Post’s story should serve as a wake-up call. We cannot afford to repeat this pattern, whether in transportation, energy, healthcare, or education. The stakes are too high and the window for action is narrowing. It’s time for Canada to stop talking about productivity and start doing something about it.
