Monopoly and the Mandate of Canada Post

J. Gregory Sidak

Criterion Economics, L.L.C.

Daniel F. Spulber

Northwestern University - Kellogg School of Management

Yale Journal on Regulation, Vol. 14, No. 1, pp. 1-84, Winter 1997

Mail delivery is one of the few economic activities that has avoided the wave of deregulation and privatization that has swept network industries over the last few decades. This Article examines several questions regarding the business activities of Canada Post Corporation in a competitive environment. What should be the appropriate mandate of Canada Post? If Canada Post is a natural monopoly, what form of regulation best serves Canadian consumers? If Canada Post's delivery of letter mail is not a natural monopoly, what basis exists for retaining Canada Post's current statutory monopoly? What potential exists for Canada Post to abuse its statutory monopoly-and other statutory privileges and immunities-to compete unfairly against efficient private suppliers of postal services?

Part I of this Article outlines the regulatory and institutional setting in which Canada Post operates, including the nature and extent of Canada Post's legal monopoly. Part II demonstrates why technological justifications for the postal monopoly are no longer valid. Part III establishes that public provisions of the full range of postal services is no longer needed. Part IV explains how postal pricing and regulation can cause competitive problems for private firms because of incorrect measurement and misallocation of attributable costs and because of the potential to misuse Ramsey pricing principles. Part V presents four options that are available to the Canadian Parliament for addressing the problem of protecting efficient competition from the postal monopoly.

Number of Pages in PDF File: 85

JEL Classification: D4,K0,K2,K21,K23,L1,L4,L43,L44,L5,L51

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Date posted: November 2, 2001  

Suggested Citation

Sidak, J. Gregory and Spulber, Daniel F., Monopoly and the Mandate of Canada Post. Yale Journal on Regulation, Vol. 14, No. 1, pp. 1-84, Winter 1997. Available at SSRN: https://ssrn.com/abstract=289390 or http://dx.doi.org/10.2139/ssrn.289390

Contact Information

J. Gregory Sidak (Contact Author)
Criterion Economics, L.L.C. ( email )
1717 K Street, N.W.
Washington, DC 20006
United States
(202) 518-5121 (Phone)
HOME PAGE: http://www.criterioneconomics.com
Daniel F. Spulber
Northwestern University - Kellogg School of Management ( email )
606 Leverone Hall
2001 Sheridan Road
Evanston, IL 60208
United States
847-491-8675 (Phone)
847-467-1777 (Fax)
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