Popular and profitable postal banking
This text first appeared in my bimonthly column « C’est What? » in the New Brunswick Telegraph Journal on May 10 2024.
How much more could we do as a country, given what we have? A question that I suspect was behind our grand schemes that gave Canada things like universal health care and public pensions.
But for decades now, many leaders – political and business – have preached the gospel of doing more with less. The difference is that when we ask ourselves “what more could we do”, it’s about our potential, what we would like to see happen.
Canada is a prosperous country that has done a better job than many at building a caring society. Lately, we have stretched ourselves again, looking to do more, for example by laying the foundations for affordable child-centered care.
I thought of all this while reading how popular postal banking is in countries around the world. Banking at post offices is popular and profitable in New Zealand, France, Italy, Brazil and some other countries. In some cases, the postal banking revenues cover the losses on the postal side.
Post offices are still found in most Canadian communities. In some they are the only bricks-and-mortar government service. About half of communities with post offices have no banks. Putting banking services in post offices would help bring banking back to areas deserted by big banks and credit unions.
Postal banking also helps people who don’t qualify for services in the big banks, preventing some from falling prey to those gouging payday loan companies. National anti-poverty groups and hundreds of municipalities have called for postal banking.
What’s not to like about postal banking? All those benefits, while sticking it to Canada’s obscenely profitable big banks and payday lenders? Even if you don’t expect to use postal banking, you would still benefit because it helps economic development, and helps ensure a post office will stay in your community.
Canada actually had postal banking from 1868 to 1968. Its recent ill-advised venture with TDBank loans was quickly dropped, but for years Canada Post has provided financial services such as money orders, money transfers and prepaid credit cards. The federal government has experience operating several successful banks – Business Development Bank, Farm Credit Canada, Bank of Canada, Canada Mortgage and Housing, Export Development, and Canada Infrastructure Bank, and could surely take on banking services at Canada Post.
Last week, Canada Post announced its year-end losses, over $700 million. This week, the cost of stamps increases slightly. It is plain that something has to be done to diversify Canada Post services.
We are richer than we think. We should help ourselves out.
Mon doux 