The union representing striking Canada Post workers is calling on the federal government to support the creation of postal banking as a way to stabilize the Crown corporation’s shaky finances. But a business analyst warns the idea faces steep odds against Canada’s powerful banking sector.
Postal banking — the provision of financial services through post offices — was once a part of Canada’s postal system through a national savings bank that existed until 1969. The Canadian Union of Postal Workers (CUPW) argues that reintroducing it could offer an alternative to payday lenders and provide essential banking services in underserved communities. The union cites international examples where postal banking has succeeded and says similar programs could work in Canada.
However, Ian Lee, a business professor at Carleton University, says competing with Canada’s major banks would be nearly impossible. “We have some of the most powerful, large, successful banks on the planet,” Lee told CTV Your Morning. “That’s why big American banks have not come into Canada — they know they will not succeed.” He noted that Canada’s existing credit unions already serve many communities that the union claims are “unserved.”
Lee cautioned that subsidizing Canada Post to compete with credit unions could trigger strong backlash in communities across the country. Credit unions are non-profit financial institutions owned by their members and play a key role in local economies.
The push for postal banking comes amid rotating strikes by CUPW, which represents 55,000 workers nationwide. The strikes began after Ottawa unveiled major changes aimed at stabilizing Canada Post’s finances in response to falling letter mail volumes, including reducing delivery services and closing some post offices. The union says its strike strategy is designed to minimize disruption while negotiations continue.
