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NAFTA Tribunal Rules That UPS's Claim Against Government of Canada to Move Forward
2002 Press Release
NAFTA Tribunal Rules That UPS's Claim Against Government of Canada to Move Forward
Tribunal to Decide - Does Canada Post Compete Unfairly?
Mississauga - November 22, 2002 - The NAFTA Tribunal hearing the lawsuit filed by United Parcel Service (UPS) against the Government of Canada ruled today that UPS's allegations of unfair competition by Canada Post's express delivery services - Xpresspost and Priority Courier - are subject to NAFTA. The Tribunal rejected the Government of Canada's argument that the failure by Canada to ensure fair competition by Canada Post's express delivery services was outside the jurisdiction of NAFTA.
In its claim, UPS argues that the Government has allowed Canada Post to compete unfairly by using privileges obtained from its monopoly over lettermail for the benefit of its express delivery services.
The Tribunal will now proceed to consider UPS allegations that Canada Post uses its lettermail monopoly to cross-subsidize its competitive courier operations. In addition, the Tribunal will consider UPS allegations regarding the federal Government's exclusive provision of hundreds of millions of dollars in financial support and subsidies to help defray Canada Post's employee pension and benefits plan costs.
"This is an important step forward for UPS and also for Canada's 1,400 private sector courier companies that compete against Canada Post. It means that all of these Canadian owned courier companies stand to benefit if UPS is ultimately successful on the merits phase of its NAFTA lawsuit," said Susan Webb, UPS Canada spokesperson. "UPS is encouraged by the decision because it means that under the NAFTA the Government of Canada is accountable for ensuring that Canada Post competes fairly."
Despite numerous independent studies and commissions over the past two decades calling for a variety of measures to make Canada Post more accountable, the Government of Canada has failed to implement measures to ensure Canada Post's express delivery services compete fairly. The Government of Canada virtually ignored the findings from its own review, the 1996 Canada Post Mandate Review (also known as the "Radwanski Report"), which found that, a lack of oversight of Canada Post "had created a serious anomaly: an unregulated public sector monopoly engaged in unrestrained competition with the private sector." The report also recommended that the Government get out of the courier business. "UPS is not taking this action lightly. We filed our claim only after exhausting all other avenues with the Government of Canada," added Webb.
Postal Monopolies on Notice
"It's important to note that this action is about Canada Post's competitive products and services, it is not about the universal lettermail monopoly," stressed Webb.
The decision marks the latest development in what is becoming an international trend of enhanced postal accountability. The European Commission, acting upon formal complaints launched by UPS, issued two decisions within the last year effectively prohibiting the German post office from using monopoly lettermail profits to cross-subsidize its express delivery services.
"These decisions underscore an important principle that if postal monopolies are going to compete against the private sector they should compete fairly," said Webb.
About UPS Canada
Since its establishment over 25 years ago UPS Canada has invested millions of dollars in Canada to build up a network of buildings, sorting machinery, vehicles and aircraft, and is positioned as an important contributor to the Canadian economy, with a significantly greater potential. UPS serves every address in Canada and employs over 6,500 Canadians. Additional information about UPS Canada is available at www.ups.ca
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For More Information:
Susan Webb
UPS Canada Public Relations
Tel. : (905) 676-1708 / 6275
Peter Howard
Sussex Strategy Group
Tel. : (416) 961-6611 x. 102
2002 Press Release
NAFTA Tribunal Rules That UPS's Claim Against Government of Canada to Move Forward
Tribunal to Decide - Does Canada Post Compete Unfairly?
Mississauga - November 22, 2002 - The NAFTA Tribunal hearing the lawsuit filed by United Parcel Service (UPS) against the Government of Canada ruled today that UPS's allegations of unfair competition by Canada Post's express delivery services - Xpresspost and Priority Courier - are subject to NAFTA. The Tribunal rejected the Government of Canada's argument that the failure by Canada to ensure fair competition by Canada Post's express delivery services was outside the jurisdiction of NAFTA.
In its claim, UPS argues that the Government has allowed Canada Post to compete unfairly by using privileges obtained from its monopoly over lettermail for the benefit of its express delivery services.
The Tribunal will now proceed to consider UPS allegations that Canada Post uses its lettermail monopoly to cross-subsidize its competitive courier operations. In addition, the Tribunal will consider UPS allegations regarding the federal Government's exclusive provision of hundreds of millions of dollars in financial support and subsidies to help defray Canada Post's employee pension and benefits plan costs.
"This is an important step forward for UPS and also for Canada's 1,400 private sector courier companies that compete against Canada Post. It means that all of these Canadian owned courier companies stand to benefit if UPS is ultimately successful on the merits phase of its NAFTA lawsuit," said Susan Webb, UPS Canada spokesperson. "UPS is encouraged by the decision because it means that under the NAFTA the Government of Canada is accountable for ensuring that Canada Post competes fairly."
Despite numerous independent studies and commissions over the past two decades calling for a variety of measures to make Canada Post more accountable, the Government of Canada has failed to implement measures to ensure Canada Post's express delivery services compete fairly. The Government of Canada virtually ignored the findings from its own review, the 1996 Canada Post Mandate Review (also known as the "Radwanski Report"), which found that, a lack of oversight of Canada Post "had created a serious anomaly: an unregulated public sector monopoly engaged in unrestrained competition with the private sector." The report also recommended that the Government get out of the courier business. "UPS is not taking this action lightly. We filed our claim only after exhausting all other avenues with the Government of Canada," added Webb.
Postal Monopolies on Notice
"It's important to note that this action is about Canada Post's competitive products and services, it is not about the universal lettermail monopoly," stressed Webb.
The decision marks the latest development in what is becoming an international trend of enhanced postal accountability. The European Commission, acting upon formal complaints launched by UPS, issued two decisions within the last year effectively prohibiting the German post office from using monopoly lettermail profits to cross-subsidize its express delivery services.
"These decisions underscore an important principle that if postal monopolies are going to compete against the private sector they should compete fairly," said Webb.
About UPS Canada
Since its establishment over 25 years ago UPS Canada has invested millions of dollars in Canada to build up a network of buildings, sorting machinery, vehicles and aircraft, and is positioned as an important contributor to the Canadian economy, with a significantly greater potential. UPS serves every address in Canada and employs over 6,500 Canadians. Additional information about UPS Canada is available at www.ups.ca
###
For More Information:
Susan Webb
UPS Canada Public Relations
Tel. : (905) 676-1708 / 6275
Peter Howard
Sussex Strategy Group
Tel. : (416) 961-6611 x. 102