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Canada Post CEO defends delivery cuts, says seniors will get more exercise

Canada Post CEO Deepak Chopra pose for a photograph Dec. 16, 2013 in Ottawa.

Dave Chan/The Globe and Mail

Canada Post 's top executive says ending home delivery and shifting millions of Canadians to community mailboxes offers at least one unintended upside – more exercise for seniors.

Making his first public appearance since the post office announced a controversial plan to stem mounting losses, Canada Post chief executive Deepak Chopra cast the austerity moves as a careful balance between the competing needs of Canadians and the Crown corporation's dire financial predicament.

The changes include an end to home delivery of letters, a 35-per-cent hike in the price of stamps and the elimination of up to 8,000 jobs.

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Many welcome the idea of walking to a centralized neighbourhood mailbox – already the reality for roughly a quarter of households – he said at an emergency session of the House of Commons transport committee Wednesday, requested by the opposition.

"The seniors are telling me, 'I want to be healthy. I want to be active in my life,'" Mr. Chopra told MPs. "They want to be living fuller lives."

The shift to community mailboxes will free up more quality time for busy families by making it easier for them to receive online purchases at secure locations, he added.

Mr. Chopra insisted all the changes are the result of "robust" consultations with Canadians about the future of the post office in the digital age. Canada Post currently delivers mail and parcels to 15.3-million households and businesses. A third of those, or 5.1 million, that now get door-to-door delivery, will lose the service over the next five years. The rest of Canadians get their mail either at group mailboxes, apartment lobby boxes, post offices or on rural roads, and they will be unaffected.

The suggestion that Canadians want less service and higher rates sparked outrage from opposition MPs and the Canadian Union of Postal Workers. They also complained that Canada Post didn't explore options to generate more revenue, including offering banking services.

Liberal MP David McGuinty mockingly called Mr. Chopra's postal plan "mail Participaction" – a reference to the government's national fitness program.

NDP MP Paul Dewar disputed the notion that the post office consulted widely with Canadians before announcing the changes. "Sir, most Canadians had no clue. No one knew you were doing this in a robust way," he said as he quizzed Mr. Chopra.

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Canada Post has released a 19-page document, which it describes as a summary of four months of consultations with thousands of Canadians in 46 communities across the country. In it, the post office said Canadians would support an end of home delivery and would accept higher stamp prices if it keeps the postal service from becoming a burden on taxpayers. Mr. Chopra declined Mr. Dewar's request to table the full details of those consultations, and he dodged questions about when he alerted the government of its plan to chop home delivery.

"I realize these are difficult choices that are going to be tough on some people," Mr. Chopra said.

The post office had little choice because it is facing a crippling decline in letter mail, mounting losses and a $6.5-billion pension solvency deficit, according to Mr. Chopra. "We have a corporation that is facing an inflection point with the technology that is wiping out the very foundation that [Canada Post] was built on," he told the committee.

The post office delivered 1 billion fewer pieces of mail in 2012, compared to 2007. Letter-mail volume is declining at a rate of roughly 5 per cent a year. At the same time, the post office's parcel business is growing rapidly as more people shop online.

"If the mail is changing its shape and size, don't we think the mailbox should change its size too?" he asked MPs. Doing nothing in that environment wasn't an option, he explained. "Every day of delay is going to cost us millions," he said.

Mr. Chopra promised that the installation of community mailboxes would be done in a "thoughtful manner" and that the post office would communicate extensively with Canadians. The post office is looking at mainly installing the boxes on local government land, including parks, schools and government offices, Mr. Chopra told The Globe and Mail before the committee meeting. He said Canada Post doesn't pay municipalities for locating boxes on their land. Canada Post is also considering working with retailers to install the boxes near stores, Jacques Côté, president of the post office's physical delivery network, told reporters.

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Editor's note: An earlier version of this story misidentified Canada Post's pension solvency deficit as $6.5-million instead of $6.5-billion. This version has been corrected.

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