The death of Canada Post

If you are a Canadian you got some hefty news this past week.

First, Canada Post announced that they will do away with door to door delivery to millions of Canadian households in urban areas.

Then they launched another bombshell. At the end of March 2014, the price of a domestic stamp will go from 63 cents to 85 cents if you buy a booklet of stamps or $1 if you buy a single stamp [all plus taxes]. Of course other rates within Canada, to the US and elsewhere will also jump exponentially.

Those who are in a house, a duplex and a small building will sometime in the next few years have to walk to a “community” mailbox to pick up their mail. Those in larger building probably already have a building mailbox.

[Interesting to note that there was talk of reducing the number of delivery days from 5 days to 4.]

Already there are complaints by [for example] seniors who will have to walk outside a couple of blocks or so to get their mail. [Some do say if you can’t walk a couple of blocks, why are you in a house.]

Charities will hurt as their postage cost will jump 30% or so. [Others are commenting that charities don’t know what they are doing anyways. You request a single mailing a year and they ignore it. Meanwhile dead people are still getting charity letters.]

The crown corporation has been losing money for years. Domestic mail volume has dropped 25% over the past number of years – I guess with more people having access to the Internet.

They claim they could lose $1 billion a year [you read right] by 2020. The claim could be a bit exaggerated as they lost just $130 in the first 9 months this year.

Local franchised post offices [i.e. small post offices within a pharmacy or a small store] already number over 6400 – more than McDonald’s and Tim Hortons combined in Canada] and Canada Post expect at least another 1000 post offices to handle not the sale of postage but the increasing number of packages that will need to be picked up because they can’t be delivered personally.

While mail volume has dropped, package volume has increased over the years as more Canadians shop online. As well, Canada Post is handling more and more unaddressed mail such as flyers and coupons.

Another problem is that not only do they have their own package service but they also own another one. So they are competing against themselves.

During the summer a package not even worth $15 was sent to my nephew in Alberta where he was at a summer a job. The package took 12 days to get there and cost over $20 – and this was the cheapest.

I don’t know how many stamps I have received that were never canceled. So they can be reused.

The odd thing was that a few years ago, of all things, Canada Post helped the Afghanistan government in modernizing their mail service.

Meanwhile, Canada Post has told the franchised post offices they can’t sell any booklets of “P” stamps. The “P” stamps are stamps for a single domestic envelope [within the regular mail dimensions] but a valid for no matter how many postage increases or the number of years. Post offices are now sitting on stock they can’t sell until the end of March. One owner complained he just bought 10,000 stamps [worth $6,300 currently]. He can’t sell them.

With the increase in postage rate, I’m expecting a further drop in mail usage. They are shooting themselves in the foot.

What Canada Post should have done was to kill the door to door service. This would probably kill 8000 jobs but is probably necessary. Add to that the annual 2 or 3 cent increase – but not the reduced service and a huge increase at the same time.

The Harper government generally has to approve any major changes as the government owns Canada Post. This probably won’t sit well with most Canadians and the opposition parties will pounce on the government.

Already the government has been hit with multiple controversies and scandals. They didn’t need another one.

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About ebraiter
computer guy

2 Responses to The death of Canada Post

  1. I think this is the best news coming out of Ottawa in years. Finally, someone is looking at a Crown Corporation from the point of a business, instead of continually thowing Taxpayer money at the problem!

    • ebraiter says:

      While [as I said] I do agree mostly, jacking up the rates and so steep was a bit too much.
      It is interesting to note that this was announced after parliament retired for the fall session. So we won’t hear much until [I believe] early February, about 7 weeks prior to the first change – the postage increase.

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