Business
Canada’s postal service would benefit from liberalization, privatization, new MEI publication shows
From the Montreal Economic Institute
- Canada Post has accumulated $3.8 billion in losses since 2018.
- The Crown corporation is receiving a $1-billion taxpayer loan to stay afloat in 2025-2026.
- Privatization should include an employee share ownership plan.
Privatizing Canada Post and opening up the sector to competition would result in better services and lower prices for Canadians, shows a new publication released by the MEI.
“Canadians are held hostage by a postal system that is inefficient, strike-prone, and, increasingly, financially non-viable,” says Vincent Geloso, senior economist at the MEI and co-author of the report. “We should follow the lead of European countries like Germany that have liberalized and privatized their postal services, with excellent results.”
Canada Post has a federal monopoly on regular letter mail, making it the only entity legally permitted to deliver non-express letters.
The Crown corporation has run deficits for seven straight years, accumulating over $3.6 billion in losses over the past decade.
Meanwhile, letter volume in Canada has fallen from 5.5 billion letters in 2006 to 2 billion in 2024, a 64 per cent decline.
Canada Post’s market share in parcel delivery has also cratered, falling from 62 per cent in 2019 to 24 per cent in 2024, as private competitors have captured more of the growing market.
In December 2024, more than 55,000 Canada Post workers went on a 32-day strike that ground mail and parcel delivery to a halt causing a backlog of nearly 10 million packages, impacting individuals and businesses alike. The strike reportedly cost small businesses an estimated $1.6 billion.
This past May, another union issued a strike notice and began a nationwide overtime ban, again obstructing delivery volumes. Currently, Canada Post employees are voting on the corporation’s latest offer; if the vote fails, there are fears that another strike would ensue.
“There is an inherent problem with monopolies,” explains Mr. Geloso. “No competition means no incentive to be efficient or innovate, which means higher prices by way of increased costs, and consumers are left with no alternative.”
In 1989, Germany decided to open up its market to a limited amount of competition, and by 2008, the sector was fully liberalized.
Privatization of Deutsche Post started in 2000, and currently, the government holds only a small minority stake in the former monopoly.
Today, over 15,000 firms offer some sort of postal service in Germany. The country’s mail service generally outperforms those of other European countries.
In Canada, the cost of sending a letter is 50 per cent higher today than it was in 1989 (inflation-adjusted).
In Germany, postage prices have fallen by 10 per cent over the same period (after accounting for inflation).
The MEI recommends the following steps to kickstart a two-year process of privatizing Canada Post:
- Offer employees shares: This would give workers a stake in the company’s success and help prevent insiders from taking advantage during the transition (i.e., avoid asset-stripping).
- Avoid regulatory capture: A swift reform process would reduce the risk of special interest groups lobbying regulators to lock in unfair advantages in the law.
“Canada Post’s inability to adapt to the changing market shows that it won’t get better on its own; it needs a massive overhaul,” says Mr. Geloso. “Canadians are paying a lot for a second-rate service; Germany showed us how we can turn this around.”
The MEI Economic Note is available here.
* * *
The MEI is an independent public policy think tank with offices in Montreal, Ottawa, and Calgary. Through its publications, media appearances, and advisory services to policymakers, the MEI stimulates public policy debate and reforms based on sound economics and entrepreneurship.
Business
Canada needs serious tax cuts in 2026
What Prime Minister Mark Carney gives with his left hand, he takes away with his right hand.
Canadians are already overtaxed and need serious tax cuts to make life more affordable and make our economy more competitive. But at best, the New Year will bring a mixed bag for Canadian taxpayers.
The federal government is cutting income taxes, but it’s hiking payroll taxes. The government cancelled the consumer carbon tax, but it’s hammering Canadian businesses with a higher industrial carbon tax.
The federal government cut the lowest income tax bracket from 15 to 14 per cent. That will save the average taxpayer $190 in 2026, according to the Parliamentary Budget Officer.
But the government is taking more money from Canadians’ paycheques with higher payroll taxes.
Workers earning $85,000 or more will pay $5,770 in federal payroll taxes in 2026. That’s a $262 payroll tax hike. Their employers will also be forced to pay $6,219.
So Canadians will save a couple hundred bucks from the income tax cut in the new year, but many Canadians will pay a couple hundred bucks more in payroll taxes.
It’s the same story with carbon taxes.
After massive backlash from ordinary Canadians, the federal government dropped its consumer carbon tax that cost average families hundreds of dollars every year and increased the price of gas by about 18 cents per litre.
But Carney’s first budget shows he wants higher carbon taxes on Canadian businesses. Carney still hasn’t provided Canadians a clear answer on how much his business carbon tax will cost. He did, however, provide a hint during a press conference he held after signing a memorandum of understanding with the Alberta government.
“It means more than a six times increase in the industrial price on carbon,” Carney said.
Carney previously said that by “changing the carbon tax … We are making the large companies pay for everybody.”
Carney’s problem is that Canadians aren’t buying what he’s selling on carbon taxes.
Just 12 per cent of Canadians believe Carney that businesses will pay most of the cost of his carbon tax, according to a Leger poll. Nearly 70 per cent of Canadians say businesses will pass most or some of the cost to consumers.
Canadians understand that it doesn’t matter what type of lipstick politicians put on their carbon tax pig, all carbon taxes make life more expensive.
Carney is also continuing his predecessor’s tradition of automatically increasing booze taxes.
Ottawa will once again hike taxes on beer, wine and spirits in 2026 through its undemocratic alcohol tax escalator.
First passed in the 2017 federal budget, the alcohol escalator tax automatically increases federal taxes on beer, wine and spirits every year without a vote in Parliament.
Federal alcohol taxes are expected to increase by two per cent on April 1, and cost taxpayers $41 million in 2026. Since being imposed, the alcohol escalator tax has cost taxpayers about $1.6 billion, according to industry estimates.
Canadians are overtaxed and need the federal government to seriously lighten the load.
The biggest expense for the average Canadian family isn’t the home they live in, the food they eat or the clothes they buy. It’s the taxes they pay to all levels of government. More than 40 per cent of the average family’s budget goes to paying taxes, according to the Fraser Institute.
Politicians are taking too much money from Canadians. And their high taxes are driving away investment and jobs.
Canada ranks a dismal 27th out of 38 industrialized countries on individual tax competitiveness, according to the Tax Foundation. Canada ranks 22nd on business tax competitiveness. Canada is behind the United States on both measures.
A little bit of tax relief here and there isn’t going to cut it. Carney’s New Year’s resolution needs to be to embark on a massive tax cutting campaign.
Business
DOOR TO DOOR: Feds descend on Minneapolis day cares tied to massive fraud
Federal agents are now going “DOOR TO DOOR” in Minneapolis, launching what the Department of Homeland Security itself describes as an on-the-ground sweep of businesses and day-care centers tied to Minnesota’s exploding fraud scandal — a case that has already burned through at least $1 billion in taxpayer money and is rapidly closing in on Democrat Gov. Tim Walz and his administration.
ICE agents, working under the umbrella of the Department of Homeland Security, fanned out across the city this week, showing up unannounced at locations suspected of billing state and federal programs for services that never existed. One day-care worker told reporters Monday that masked agents arrived at her facility, demanded paperwork, and questioned staff about operations and enrollment.
“DHS is on the ground in Minneapolis, going DOOR TO DOOR at suspected fraud sites,” the agency posted on X. “The American people deserve answers on how their taxpayer money is being used and ARRESTS when abuse is found.”
DHS is on the ground in Minneapolis, going DOOR TO DOOR at suspected fraud sites.
The American people deserve answers on how their taxpayer money is being used and ARRESTS when abuse is found. Under the leadership of @Sec_Noem, DHS is working to deliver results. pic.twitter.com/7XtRflv36b
— Homeland Security (@DHSgov) December 29, 2025
Authorities say the confirmed fraud already totals roughly $300 million tied to fake food programs, $220 million linked to bogus autism services, and more than $300 million charged for housing assistance that never reached the people it was meant to help. Investigators from the FBI, Justice Department, and Department of Labor have now expanded their probes after a viral investigation exposed taxpayer-funded day cares that received more than $1 million each while allegedly serving few — or zero — children.
One of the most glaring examples, the Minneapolis-based Quality “Learing” Center — infamous for its misspelled sign — suddenly appeared busy Monday as national media arrived. Locals told reporters the center is typically empty and often looks permanently closed, despite receiving about $1.9 million in public funds. State inspection records show the facility has racked up 95 violations since 2019. Employees allegedly cursed at reporters while children were bused in during posted afternoon hours.
DHS officials say the “DOOR TO DOOR” operation is deliberate. In videos released online, agents are seen questioning nearby business owners about whether adjacent buildings ever had foot traffic, whether they appeared open, and whether operators used subcontractors or outside partners to pad billing. DHS Secretary Kristi Noem posted footage of agents pressing workers about business relationships and transportation services used by suspected fraud sites.
“This is a large-scale investigation,” DHS Assistant Secretary Tricia McLaughlin told the New York Post, confirming that Homeland Security Investigations and ICE are targeting fraudulent day-care and health-care centers as well as related financial schemes.
FBI Director Kash Patel warned that what investigators have uncovered so far is “just the tip of a very large iceberg.” He pointed to the bureau’s dismantling of a $250 million COVID-era food-aid scam tied to the Feeding Our Future network, a case that resulted in 78 indictments and 57 convictions. Patel has also made clear that denaturalization and deportation remain on the table for convicted fraudsters where the law allows.
Dozens of arrests have already been made across the broader scheme, many involving Somali immigrants, though federal officials stress the investigation targets criminal behavior — not communities. Some local residents say the scandal is hurting law-abiding families. One Somali Uber driver told reporters he works 16-hour days and is furious that “some people are taking advantage of the system,” making the entire community look bad.
Now, with federal agents going “DOOR TO DOOR” across Minneapolis, the era of polite indifference appears to be over. The message from Washington is blunt: the money trail is being followed, the paperwork is being checked, and the days of treating taxpayer-funded programs like an open vault are coming to an end.
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