The head of the union that represents Canadian postal workers says the country's government-run mail service could fill a gap left by big banks by providing personal financial services that are not available in many parts of the country.

The topic is set to be debated in Parliament after London-Fanshawe New Democrat MP Irene Mathyssen introduces a private member's motion for Canada Post to add banking to its list of public services.

We have twice as many Canada Post locations as there are Tim Horton's in this country. - Mike Palecek

Mike Palecek, the national president of the Canadian Union of Postal Workers told London Morning guest host Colin Butler Monday that if implemented, it would revive an idea as old as Confederation. Indigenous communities or small towns previously ignored by big banks, or from which big banks have pulled out, could be served by Canada Post.

"We have twice as many Canada Post locations as there are Tim Horton's in this country," Palecek said. "The big banks are shutting down their bank branches in rural Canada and they don't have a single bank branch left, but they do have a post office. Rural Canada has been abandoned by the big banks."

Disappearing bank branches

This former Bank of Montreal in London, Ont. is now a nightclub in the city's downtown. Just one example of the thousands of bank branches across Canada that have been shuttered since 1990. (Colin Butler/CBC News)

According to a 2013 report from the Canadian Centre for Policy Alternatives, the rise of Internet banking and ATMs has led to the closure of about one in four bank branches across Canada, from 7,964 branches in 1990 to 5,908 branches in 2002.

The report also states that the problem has disproportionately affected rural parts of the country, with the big banks shuttering 45 per cent of their locations in rural areas of Canada.

Within Canada's Indigenous communities, the problem is even worse. There are few branches within First Nations communities, despite the explosive growth in Canada's Indigenous population.

"We have six big banks that control most of the banking sector and I don't think people feel particularly well served by them," Palacek said.

Support for postal banking building

People living in rural communities are running out of banking options, after the number of bank branches in small town Canada decreased by 45 per cent in the last two decades. (Graeme Roy/The Canadian Press)

"We're paying some of the highest bank fees in the world in this country because of a lack of a public option."

Recently Canada's big banks have faced criticism for unscrupulous sales tactics that put profits ahead of its customers and employees.

Postal banking exists in many countries, including France, Italy, Germany, Brazil and New Zealand, where despite skepticism that a government-run bank would turn a profit, Kiwibank made $79 million last year.

"Obviously it has to be adapted to the Canadian context," Palacek said. "I think support for it is building."

Palacek said that postal banking could also offer relief to low income Canadians, who he says are often forced to use cheque cashing services in order to secure loans, often with high interest rates attached.

"It traps the most marginalized people in our society into a cycle of debt," he said. "I think there's a role for public banking in ending that cycle of debt."