That's not to say that it's doing anything wrong. In fact, the Crown corporation has been one of the most innovative postal services in the world.

The problem is that the Canada Post's raison d'etre is changing fast, thanks to technological innovation in the communications industries.

Some groups are calling for the Canadian government to abolish Canada Post's monopoly in the letter business. These include the Vancouver-based Fraser Institute and, by implication, United Parcel Service, Inc. (UPS), which is suing the Canadian government over Canada Post being allowed to undertake what UPS deems anti-competitive practices.

However, I suspect Canada Post's own unions and customers are reluctant to change, many of them being in denial about what the delivery world is becoming.

I have a proposal - perhaps unpopular to both sides - that could address the legitimate concerns raised by the would-be reformers, but without abolishing our finest Crown corporation.

The mail business is not shrinking in the face of e-mail and the Internet, as some pundits have forecast. In fact, as businesses and individuals purchase ever-increasing numbers of products online for direct delivery, mail quantities have shown healthy growth. The traditional letter business is the only part that's atrophying.

That government-owned mail services must evolve or die is being recognized by even the United Postal Union (UPU). The UPU arranges co-ordination among its 190 member-states' postal services. Its mandate since its inception in the 19th century includes developing universal postal access to all citizens of the world, which suggests it has a traditional bias toward government-owned and regulated mail delivery, the worldwide norm.

Yet even this organization reported in 2002 that to ensure the long-term viability of postal services, reform would have to take place.

In a more liberal camp sit international organizations such as the World Bank, a proponent of private-sector involvement in mail delivery. The World Bank concerns itself with postal delivery models because it recognizes that postal efficiency is integral to the success of any economy. It generally pushes for market-based, unsubsidized rates and little direct government involvement in the mail business.

Lately, the UPU and World Bank have been co-operating on projects in the developing world, mitigating each other's extremist tendencies.

In a similar vein, I am proposing that Canada Post adopt a go-slow attitude to change, gradually redefining its mandate to help itself survive, and by this process assist businesses in this country to thrive.

There is a lot at stake.

A mediocre postal service cannot but lead to sub- par business outputs. Any businessperson knows how important deliveries - both in and out - are to smooth-running operations. But the core debate rests on how much government involvement there needs to be in the process.

Proponents of free-market mail delivery point to the service, adaptability, variety, and lowered prices (for urban customers) that it encourages.

Proponents of monopolistic letter delivery such as Canada Post's - the company gets no subsidy, but does get exclusive rights to carry regular-speed letters - point to the universality (in that mail can get to every address), cost-effectiveness, reliability, fairness and safety of the system.

Thanks partly to Canada Post's relative autonomy from government interference, the company is innovating. In the last five years, it has developed one of the most sophisticated, practical online resources in the world. (Business Edge uses it on a daily basis, as Canada Post is one of this magazine's largest contractors.)

But with growing online commerce and trade, the delivery business has shifted in ways that threaten Canada Post, which doesn't specialize in moving items fast, nor those that weigh more than about two kilograms.

To survive long-term, our post office needs to become a conduit that almost any courier or small-freight company can tap into, becoming for the shipping business what legacy telecommunications companies are to the Internet.

If Canada Post's mandate is to last another 100 years, it should become one of the pipelines over which goods are transmitted, and not a vertically integrated "mail" company.

To make this idea work, we need to release Canada Post from the expectation that it needs to cover what in the telecom world is called the "last mile.”

Canada Post already doesn't help you with your first mile, since the company has outsourced most retail outlets to contractors, and it picks up mail from only certain (though common) postal-box locations. The same thing should happen at the delivery end.

This is not a dramatic suggestion. It is already happening somewhat in rural and new suburban areas where there are community mailboxes, and in office and apartment buildings where carriers deliver to boxes at ground level.

Of course, unions don't want to give up letter-carrier jobs. Customers who now receive doorstep delivery would also complain.

But the last mile is onerous for Canada Post because the company could do other valuable things with those resources, and it could carry bulkier items if someone did not have to manually haul them around a neighbourhood. The last mile is also where the services of private companies are easiest to arrange.

Without the last-mile burden, mail could then arrive more often than five times per week, with the same employee numbers. Years down the road, through automation and flexibility, it may well be possible for Canada Post to arrange five drops a day in dense urban areas, three a day on weekends. And nothing would stop carriers from delivering everything, including the kitchen sink.

I can imagine a system in which Canada Post becomes a mail forwarder, allowing what's called "downstream entry," where senders drop packages closer to where they're ultimately going to speed up delivery (something already offered to large customers). This would make every mail depot a possible drop point; turnaround times could be mere hours. This could only work with high levels of automation and standardization, which should be the post office's main focus anyway.

UPS could then choose to tie into the infrastructure, countering the argument that the government is playing favourites, or UPS could compete on this level playing field, or both. My scenario would also create many new union jobs.

It might even make customers happier (once they got used to it), because what they'd lose in the last mile they'd gain in frequency, speed (in urban areas at least) and flexibility.

Canada Post would require a kick-butt website, sophisticated radio frequency tagging technologies using international standards, and mind-boggling logistical planning. But meeting such challenges is what Canada Post, along with the UPU, does best.

If Canada Post can't pull off something along these lines, the only other long-term options for our national mail carrier would be privatization or dissolution. Eventually, we would have an all-private mail service with the government managing addressing standards and regulating the free market.

This would involve making the post office a government department again - a scary thing. Is that where we're going? In a funny way, it's up to the postal unions to decide.

(Ian van de Burgt can be reached at ian@businessedge.ca)