UPS levels unfair competition charges against Ottawa, Canada Post

ATLANTA (April 24, 2000) — United Parcel Service has filed a $230 million lawsuit against the Canadian government for damages it claims it suffered because of unfair competition by Canada Post and its courier divisions, today’s Wall Street Journal reported.

The suit, filed last week under provisions of the North American Free Trade Agreement, alleges that Canada Post subsidizes its express-delivery operations with funds from its government-protected monopoly on first-class mail delivery.

The arrangement allows Canada Post to undercut private-sector courier companies, UPS said.

UPS also accused Ottawa of making payments to Canada Post based on the number of international shipments the post office delivers in Canada, an arrangement that doesn’t apply to private-sector companies, the Journal said. UPS also contends that Canada Post often fails to collect proper taxes and duties on packages shipped to Canada.

The case will be decided by an independent arbitration panel set up to resolve NAFTA disputes, the Journal reported. The process is expected to last more than one year.

Canada Post, which in addition to its own Xpresspost and Priority Courier services controls a 96% stake in Purolator Courier Ltd., has weathered similar allegations before. Last year, Canada’s Competition Bureau concluded that Canada Post was not improperly using its mail-delivery monopoly to subsidize courier services.

In the past, UPS has levied similar allegations against the U.S. Postal Service and Deutche Post of Germany.