by John Symon
Canada Post announced on December 11 drastic changes to how it will conduct business. The crown corporation is phasing out home delivery of regular mail to urban customers, hiking the cost of stamps, and cutting thousands of jobs according to a press release. These changes are to be implemented over the next five years explains Canada Post, which lost $104 million in the second quarter of 2013.
“With the increasing use of digital communication and the historic decline of Lettermail volumes, Canada Post has begun to post significant financial losses,” reads part of that press release. “If left unchecked, continued losses would soon jeopardize its financial self-sufficiency and become a significant burden on taxpayers and customers. In April 2013, a Conference Board of Canada study projected a financial loss of close to $1 billion by 2020 unless Canada Post makes fundamental changes to its business.”
“Over the next five years, the one third of Canadian households that receive their mail at their door will be converted to community mailbox delivery. This change will provide significant savings to Canada Post and will have no impact on the two thirds of Canadian households that already receive their mail and parcels through community mailboxes, grouped or lobby mailboxes or rural mailboxes. Community mailboxes have advantages for busy Canadians as they offer individually locked mail and small packet compartments as well as locked compartments for securely receiving parcels. The initial neighbourhoods slated for conversion in the second half of 2014 will be announced once plans are finalized. The transition is expected to take 5 years to complete on a national scale.”
Canada Post could save up to $500 million annually by switching to community mailboxes instead of delivering mail to individual households reports CBC. Other announced cost-saving measures include opening more franchise post offices and “streamlining operations.”
The corporation, which employs 71,000, also announced imminent job cuts of 6,000 to 8,000 jobs which it projects will be accompanied by some 15,000 additional workers voluntarily leaving Canada Post.
Effective March 31, the price of domestic stamps bought in rolls will rise to 85¢ each, up from the current 63¢, a 35% increase. For those customers just buying individual stamps, the cost will go up to $1 each, a 60% increase.
Canada Post claims that these new measures will collectively provide financial benefits with an estimated combined worth of $700 million to $900 million per year. Canada Post handled nearly 11 billion pieces of mail in 2009, generating $7.3 billion in revenue and $283 million in earnings that year according to Wikipedia. Other western countries, such as Austria, Belgium, Germany, and the U.K. have also been drastically restructuring mail service and/or privatizing it. Canada Post initiated mail service in 1867.
Canada Post press release: