Canada Post to phase out home delivery

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VANCOUVER (NEWS1130) – Canada Post is saying goodbye to the door-to-door postman.

The national mail service says rising costs and falling mail volumes have made it impossible to continue its traditional operations.

The federal Crown corporation plans to phase out home delivery within the next five years, replacing foot delivery with community mail boxes.

Canada Post says about 6,000 to 8,000 positions will be eliminated over the same time period, mainly through attrition.

The cost of stamps, if bought one at a time, will cost $1 each. If bought in booklets or coils, Canadians will pay $0.85 per stamp, with discounts for customers who use the mail most. The changes will take effect March 31, 2014.

The postal service expects nearly 15,000 employees to retire or leave the company in the next five years.

About a third of Canadian homes still receive mail to their door, it said.

The announcement comes in the midst of the busiest time of year for postal outets, which handle a dramatic rise in both letters and packages for the Christmas holiday.

But the company says its business model is unsustainable.

“Canada Post has begun to post significant financial losses,” it said in the announcement.

“If left unchecked, continued losses would soon jeopardize its financial self-sufficiency and become a significant burden on taxpayers and customers.”

Last month, Canada Post announced that it would ask Ottawa for financial relief next year to help support a restructuring of its business model and pension plan framework to assure long-term financial sustainability.

“The company will continue to bring the cost of labour in line with its competitors through attrition and collective bargaining over time,” it added on Wednesday.

The postal service has faced intense competition from couriers, as well as technology that has led to a growing popularity of consumers paying their bills and communicating online.

In the third quarter, Canada Post reported an improved, but still big, pre-tax loss of $109 million for the period ended Sept. 28. The pre-tax loss in the comparable period a year ago was $145 million.

Raitt defends Canada Post’s decision to phase out urban mail delivery

Transport Minister Lisa Raitt is defending Canada Post’s decision to phase out urban mail delivery.

Raitt, the minister responsible for the Crown corporation, says Canadians are sending less mail than ever, leaving Canada Post with some tough financial decisions in order to combat a steep decline in revenues.

She says a typical Canadian household buys only one to two dozen stamps a year, and mail volumes continue to plummet, having fallen nearly 25 per cent per household since 2008.

Raitt says the Conservative government supports Canada Post’s efforts to become self-sustaining “in order to protect taxpayers.”

She adds she is looking forward to “seeing progress” as Canada Post rolls out its cost-cutting plans.

Business group worries about impact on mom and pop shops

Dan Kelly with the Canadian Federation of Independent Business says postage hikes are going to hurt — pointing out 40 per cent of businesses mail at least 50 letters, invoices, or payments a month — and almost all regularly use snail mail.

“These price increases are not tiny, they’re almost a third, in many instances. We think that ultimately this is going to hasten the decline of Canada Post rather than shore it up.”

He agrees with cutting door to door delivery but argues Canada Post could have found more ways to reduce costs instead of increasing prices.

And there are concerns from the non business crowd — from people like seniors and those with mobility issues who feel getting to a neighbourhood mailbox will be difficult.

 

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