John Anderson, Why Canada Needs Postal Banking (Altona, MB: Friesen Press, 2023)

Ottawa-based long-time trade union activist and researcher, John Anderson, has authored several studies on postal banking over the last decade. In Why Canada Needs Postal Banking he has assembled his best contributions in a thirteen-chapter compendium on the issue. At first glance one could doubt the relevance of establishing new banking services at the post office. But even in a digital age the need for some bank or credit union branches in local communities is great. This is especially true for anyone trying to run a small or medium-sized business. Post office and financial institution branches are taken for granted. You really realize the need for them when you lose access to them near you and must burn a lot of gas driving long-distance to get to them. What Anderson is arguing is that there is a win-win scenario that is possible to combat the closure of post offices and maintain financial services in communities by redeveloping postal banking in Canada. I say redeveloping because Canada had postal banking for about one-hundred years from 1868-1968.

The reality is that access to banking services has been diminished in recent decades by the closure of many bank and credit union branches across Canada. About 1,200 small towns and rural communities in Canada with a post office don’t have any bank branches. Indigenous communities are particularly poorly served by the banking industry with only 54 banks or credit unions in over 615 First Nations. Even in some large cities we also found entire lower-income neighborhoods that are “bank deserts” just like they are “food deserts”. At the same time, predatory institutions of the pay-day loan or money mart type are proliferating with fees that are even higher than those paid by customers of chartered banks.

We are facing a form of market failure that requires intervention to enhance competition to potentially reduce banking costs and improve services. That is exactly what several developed countries have been doing with their respective systems of postal banking. Anderson takes us in some details through the experience of the United Kingdom, France, Italy, Switzerland, and New Zealand. He demonstrates that postal banking, while following various models, is not a rare thing. It is a tool that contributes to the financial inclusion of vulnerable populations, often in rural or remote areas, that are traditionally unbanked or underbanked. The New Zealand example of Kiwibank is particularly interesting for its attention and focus on serving the Maori community with hone building loans, etc. Similarly, postal banking could contribute to the agenda of reconciliation in Canada by assisting community economic development in indigenous communities. In France, La Banque Postale has developed an expertise in financing NGOs and Social Economy (non-profit) organizations as well as social housing projects. So postal banking has the potential to promote financial inclusion in neglected geographic areas as well as among equity deserving groups and organizations. It is therefore not surprising that the idea of postal banking (despite not being covered much in the media) enjoys a strong amount of support across the country from various actors including mayors and municipalities, unions, postal workers, and administrator, and some federal politicians.

The federal government, it is important to note, has extensive expertise and experience in overseeing or even running some financial institutions. The wide-spread network of Canada Post, its strong reputation, and its unionized employees represent key assets to extend banking services at the post office across the country by starting with the many communities that have a post office but no bank or credit union.

As with any compendium, the book suffers from some repetition from one chapter to another and it could have benefitted from a proper conclusion. It ends, instead, on a down note by stressing the lack of vision and ambition of Canada Post regarding the future of postal banking. Anderson does give us a bit of a roadmap by suggesting that the system could be phased-in following multiple steps: “At first, banking services such as savings and chequing accounts and bill payment could be offered at much lower costs than you’d find at big six banks. From there, a postal bank could expand into offering other financial services such as mortgage, business and personal loans, foreign exchange, investments, insurance, and alternative to payday loans.” (225)

The principal weakness of the work is probably in not covering sufficiently what would be the training needs required to transform some postal workers into bank clerks, and some postmasters into bankers. Anderson neglects to address this important human resource factor in a convincing way. Nevertheless, his book is a useful resource for those who want to familiarize themselves with, and perhaps advocate for, the idea of postal banking and how it can be applied in the Canadian context.

Luc Thériault

University of New Brunswick

DOI: https://doi.org/10.52975/llt.2024v94.0014.