An Oct. 2013 Canadian Centre for Policy Alternatives report by researcher John Anderson notes, "The rise of virtual and new retail banking and the growth of Fringe Financial Institutions in Canada show that the traditional financial banking sector is not meeting all the needs of Canadians. Millions of Canadians have opened accounts in or are using the services of these new institutions; but, although they operate in a similar fashion to traditional banks, they tend to be concentrated in urban areas and are not available in many parts of the country." Nearly two million Canadians a year use payday-lending services.
Additionally, the report highlights, "In Northern and rural Canada, on Aboriginal reserves, and in the three Northern territories, there have always been fewer banks and credit unions than are needed." In fact, thousands of small communities do not have a bank. And the report notes, "Some 3% to 8% of Canadians [about a million people] do not have a bank account."
As such, the report argues, "A new Canada-wide financial institution could offer products and services that challenge the existing patterns. The ability to offer competition for existing fees would be helped by the fact that banking services would be delivered through existing premises and staff. Use of the e-post system, as well as existing Canada Post delivery services, could help keep costs low. Clearly, offering postal financial services would allow the millions of Canadians without local bank branches or easy access to banking the access they need."
Canada Post already provides some financial services such as postal money orders, domestic and international money transfers, bill payment and financial transaction and payment notices, and prepaid Visa cards. The new services it could offer would include access by all bank and credit union customers to their accounts to deposit or withdraw cash, savings accounts and low-fee chequing accounts, low-interest credit cards; and prepaid debit cards. It could also eventually include mortgages, small-business loans and agricultural loans, insurance products, mutual funds and stocks, and special new products for low-income and Aboriginal peoples.
Postal banking operations exist around the world, including in Japan, China, Germany, the United Kingdom, France, Italy, Switzerland and New Zealand. And, as the CCPA report points out, "Postal banking is not something new to Canada. For over 100 years after Confederation, Canada had a postal savings system." And CUPW notes, "Our post office used to have a national saving bank up until 1968 - and there is no reason we shouldn’t have one today."
CUPW says, "Canada needs a postal bank. Thousands of rural towns and villages in our country do not have a bank, but many of them have a post office that could provide financial services. As well, nearly two million Canadians desperately need an alternative to payday lenders. A postal bank could be that alternative. Send your MP a message in support of postal banking."
To tell your Member of Parliament to support postal banking, please click here. When you do so, you will send a message that calls on Judy M. Foote, the Minister Responsible for Canada Post, to establish a task force to determine how to deliver new financial and banking services through our public postal service.
The Council of Canadians is also supporting a new campaign by The Leap Manifesto/This Changes Everything, Friends of Public Services and CUPW on this issue. More on that soon!
Barlow condemns Canada Post cuts (Dec. 11, 2013)
Postal workers ask why Canada Post not protected in CETA (Feb. 6, 2012)