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A Canada Post worker delivers mail in Delta, B.C., on Oct. 13. The Liberals promised during the election campaign to reverse cuts to door-to-door mail deliveryDARRYL DYCK/The Globe and Mail

Canada Post is halting plans to axe door-to-door delivery in favour of community mailboxes, reflecting one of the campaign promises of the newly elected Liberals.

But the move raises questions about how the post office will maintain service given the neighbourhood boxes were introduced to save hundreds of millions of dollars.

The Crown corporation on Monday said all of the conversions planned for November and beyond are on hold. Roughly 460,000 addresses across the country are in the middle of switching to community mailboxes, and thousands more have already transitioned. Canada Post expected to save between $400-million and $500-million a year after all of the community mailboxes were installed.

Canada Post introduced the community-mailbox plan in 2013 as part of its strategy to compete in an increasingly digital market. The decision faced fierce opposition in some cities, with Montreal Mayor Denis Coderre serving as the most vocal opponent. He brandished a jackhammer to break up a cement pad waiting for a community mailbox on a piece of city parkland in August.

Justin Trudeau, the prime-minister-designate, promised in the party's campaign platform to suspend the plan and carry out a study if elected.

"Canada Post is temporarily suspending future deployment of the program to convert door-to-door mail delivery to community mailboxes," the company said in a statement Monday. "We will work collaboratively with the government of Canada to determine the best path forward given the ongoing challenges faced by the Canadian postal system."

Greg Poelzer, a professor at the University of Saskatchewan's Johnson-Shoyama Graduate School of Public Policy, said that while Canada Post's decision reflects the wishes of the incoming government, Ottawa must now figure out how to make up for the financial shortfall.

"The million-dollar question is: 'How are we going to end up paying for this?'"

The government's options are limited: It can either raise delivery prices or fund the Crown corporation out of government coffers, Prof. Poelzer said. It is unlikely that Canada Post will be able to make up the difference through automation and labour negotiations, he added.

Roughly 32 per cent of Canada's 15.7 million addresses receive door-to-door delivery, Canada Post said in a presentation in March. Community mailboxes have existed for 30 years and the new plan was to be phased in over five years.

Montreal's Mr. Coderre has asked for a moratorium for months.

"I think people had other designs for Canada Post. It started to smell like privatization," the mayor said Monday evening. "I consider Canada Post an essential service. I understand there is a technological challenge that must be met, but between five days a week of home delivery and zero, there is room to move."

Montreal has several high-density neighbourhoods with little open space where installing the boxes promised to be a challenge. Canada Post recognized this, saying it would try to find indoor space with local merchants for mailboxes in those neighbourhoods. But Mr. Coderre said that plan still wasn't good enough.

"Let's reconsider the future of the mail. Let's do it inclusively. Don't run off half-cocked. Partner up with municipalities who have to manage their territory," he said.

Canada Post said it will send letters over "the next few weeks" advising customers "of the status of their mail delivery service." People already using community mailboxes – as well as those scheduled to start in October – will continue to do so. At the start of 2015, roughly one million households had either converted to the new system or had been informed they would have to do so this year, Canada Post said in its March update.

Canada Post's so-called streamlining cut the corporation's "worked hours" by about two million hours, or 3.2 per cent, in 2014 compared with 2013, according to its March update.

The union representing postal employees supports Canada Post's freeze on community mailboxes.

But Canadian Union of Postal Workers national president Mike Palecek says the union will be pushing the Liberal government to reverse the cuts to postal services that have been made so far.

With a report from The Canadian Press

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