Wednesday, June 7, 2006

Canada Post: the power and the glory in one convenient parcel

The general proposition that corporations obtain monopolistic privileges at the expense of smaller enterprises and individuals is at first glance not without merit, at least when the proposition is derived from actual instances of legally implemented protectionist regulation or subsidies and not simply bandied about as an anti-capitalist truism. Of course, the manipulation of markets and buyer/seller preferences through coercive legislative devices can hardly be called capitalism, much as it suits the propaganda needs of central economic planning devotees. But where it does exist specifically, however, it is deservedly contemptible as an artificial disincentive to competition and a politically-motivated transfer of wealth, although the indictment is rightfully less of the corporations that influence the mechanism and more of the government that starts and powers it in the first place. Only monopolies can beget monopolies.

But it should be noted that the above proposition fails even as a generality when confronted with the fact that even legally privileged corporations cannot entirely succeed without some creativity and innovation in response to consumers unless the monopoly is absolute…

…as in the absurd situation when business is actually created and owned by the government. Although no business could hardly be expected to abstain from competing in the artificial market of political and financial favours that the government sponsors, Crown Corporations own a uniquely favourable relationship with its progenitor that virtually guarantees blanket approval of monopolistic privileges that any other business could only dream of. From CTV News:

[Lou Laforet] heads up the Canadian operation of Spring Global Mail — a joint venture between several international postal companies. It ships bulk mail exclusively to destinations outside of Canada[…] International business mail is sent directly to foreign post offices, such as the U.S. Postal Service — where it is then distributed, with postage, to its final destinations. Several large Canadian organizations, including the federal government, use Spring's services.

"I mean it's not like we just started this up," said Laforet. "We've been doing this for 20 years. We've developed this over the years."

Even so, Canada Post has taken legal action to put Spring out of business. The Crown corporation went to court — arguing it has a legal monopoly over all Canadian mail.

The courts agreed. The Crown corporation is now trying to enforce that ruling — seeking an injuction that would effectively close Spring's international mail operation in Canada — and put 100 people out of work.
As it turns out, the court's ruling was based on the Exclusive Privilege section of the Canada Post Corporation Act, which unfortunately for Canada Post contains this provision in the English version of the law:
14. (1) Subject to section 15, the Corporation has the sole and exclusive privilege of collecting, transmitting and delivering letters to the addressee thereof within Canada. [Emphasis added.]
Much more fortunate for Canada Post, and for a judiciary more sympathetic to political authority — now that it has acquired some of its own — than to the letter of the law, the French version of the law is far more ambiguous about the geographic destination of letters covered under the privilege:
14. (1) Sous réserve de l’article 15, la Société a, au Canada, le privilège exclusif du relevage et de la transmission des lettres et de leur distribution aux destinataires
… and under the ambiguity the fist of monopoly has precedence, au naturel. This legal circus demonstrates the asininity of laws granting monopolistic privileges, when rendering the laws in different languages yields arbitrary and equivocal intents. Nothing a little fraternity between different branches of the prime monopoly can't solve to their mutual satisfaction, of course…

Notwithstanding its own added business at the cost of lost jobs for its competitors, elimination of choice for consumers, and the net loss of wealth in the economy, Canada Post still somehow manages to cast itself not as an unscrupulous over-sized agressor but as a defender of Canadian virtue:
[Senior Vice President of Transaction Mail for Canada Post, Peter] Melanson insists Canada Post is not concerned about the competition — rather, he said, the issue is what he calls illegal activity. "It's not the fact that it is a significant portion of our business its more the fact that we believe what they are doing is against the law," said Melanson. "This is our business and we will defend the business because we have to service all of Canada."
…the Canadian virtue being the convenient and ready-to-wear axiom that the law is right and the right is the law. It's completely coincidental, of course, that the axiom is so perfectly self-serving in this case.