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Five reasons why raising the price of stamps may not save Canada Post Add to ...

Canada Post upped the price of mailing a first-class letter Monday to 85 cents from 63 cents (and to a $1 for single-stamp purchases). The 35-per-cent price hike is step one of a 5-year plan, announced in December, to stop steep predicted rises in the Crown Corporation’s financial losses – a strategy that also includes up to 8,000 job cuts, franchising more post offices and the end of home delivery for millions of Canadians.

Canadian postal rates, 1943-2014

SOURCE: Canadian Philately

It hastens the decline of the post office’s main business

Canada Post projects it will bring in $200-million per year by charging closer to the real cost of delivering the mail. But the higher price could become one more reason not to mail a letter. Letter-mail volume is already dropping by more than 6 per cent per year. The Conference Board of Canada estimates that volumes will drop another 27 per cent by 2020.
Frank Gunn/CP

The web has made mail increasingly irrelevant

Canadian households buy an average of just two stamps a month. That’s not a surprise when you consider all the new and more convenient ways Canadians have to communicate, including online bill paying, mobile payments, texting and email.
John Lehmann/The Globe and Mail

Canada Post's big pension problems

Like many older shrinking institutions, the post office has more retirees than workers – 70,000 pensioners and roughly 60,000 employees. Ottawa is ultimately on the hook for a solvency deficit in the company’s pension plan, estimated at nearly $6-billion at the end of 2012. But the government is insisting that the post office deal with the problem with its own dwindling resources.
Frank Gunn/CP

The phase out of home delivery is alienating Canada Post’s most loyal users

The plan is to move millions of Canadians who now receive mail at their door to central community mailboxes. That risks hurting the post office’s most loyal customers – the elderly and small businesses. Many seniors will now have to physically pick up mail, even in bad weather. And if Canadians find it difficult to get to community mail boxes, companies will look beyond mail to do business.
Deborah Baic/The Globe and Mail

Its a mail system built for letters

Canada Post is trying to transform itself into a parcel and courier company. But its workforce, physical infrastructure and pricing is still aimed largely at meeting its obligation to serve every home in Canada. Hiking the price of a stamp won’t fix that problem, particularly when it costs the same to deliver a letter from St. John’s to Port Alberni, B.C. as it does to mail a letter across Yonge St. in Toronto.

Follow on Twitter: @barriemckenna

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