Canada Post Corp., which is struggling to contain losses as mail volumes decline, is going to start charging housing developers $200 per address for community mailboxes, a cost the industry says will be passed on to home buyers.
The real estate industry, which was caught off guard by the decision, plans to go to battle with the Crown corporation over the charge, which could amount to tens of millions of dollars annually.
The industry argues that the fee would unfairly penalize buyers of newly built houses, who must fetch their mail from the so-called superboxes, while residents in older homes still get mail delivered to their doors.
The community mail and parcel boxes have been in use since the 1980s and are standard in new developments. About 3.8 million households, or one in four Canadian homes, already have them.
Canada Post argues that, with online shopping on the rise, the new mailboxes provide added value to homeowners by giving them a safe spot to receive packages. It said mailboxes are no different from other infrastructure to which developers already contribute, such as roads, street lights, fire hydrants, sewers and electricity.
The Crown corporation began to lose money last year, a trend that has continued in the first two quarters of this year, with its traditional business facing a steep decline. Households are receiving about 20-per-cent less mail than they were five years ago, so the agency is seeking to cut costs and raise revenue to boost profit.
"With the company facing a loss of $327-million last year and mail volumes continuing to decline, we need to look for partial cost recovery to help with the cost of adding new addresses," said Canada Post spokesman Jon Hamilton. "We're not in the development business, we're simply in the mail-delivery business."
He said Canada Post will continue to pay for part of the boxes' installation, "plus the maintenance, plus obviously the delivery and then any work required in terms of snow clearing and grass cutting if that's necessary."
Ron Olson, president of the Canadian Home Builders' Association, said builders and developers across the country were "blindsided" by the move and will fight it.
Mr. Olson said that the cost will definitely be passed on to home buyers. "Why should new homeowners pay that kind of cost when other people who are receiving mail right to their door have none?" he said. "They're charging them for substandard service."
Brian Johnston, chief operating officer of Mattamy Homes, the largest builder of new homes in the country, said he doesn't see how the cost can be justified. "They don't charge for post offices, we don't pay for sorting machines, we don't pay for postal workers," Mr. Johnston said. "The only reason they're doing this is because they think they can get away with it. They don't have a good reason."
He added that industry contracts have clauses that deal with which party pays for new fees, but "in the long run it gets built into the cost of a home, and the purchaser will pay for it."
The new charge will be applied beginning in January. It will not apply to apartment and condominiums, whose developers already pay some of the cost of installing mailboxes, Canada Post said.
Because of new construction, about 150,000 to 200,000 new mailing addresses are added each year, the postal agency said.
"This increases Canada Post's costs by millions of dollars a year, for installation and other costs," it said. "The sharing of a part of the costs of installing [mailboxes] is necessary to ensure that Canada Post is able to maintain the high level of service that Canadians have come to expect, while helping to ensure the corporation does not become a drain on the taxpayers of Canada."