A plan to address major financial losses for Canada Post will see door-to-door service end in cities, job cuts and major hikes in the price of stamp from 63 cents to $1.
© Nick Moase Photo
Stamps are taking a big jump in price in the new year, as Canada Post struggles to stay financially viable.
In a five-point Action Plan released today (Dec. 12) Canada Post showed off its plans to cut thousands of jobs (mainly through attrition) over the next five years.
Canada Post says due to declining mail volumes and increasing digital alternatives to mail, a new pricing structure for letters mailed within Canada will be introduced.
On March 31, 2014, Canada Post plans to launch a new tiered stamp pricing structure.
• New prices (before tax) will be launched for the customers that buy stamps in booklets and coils, representing 98 per cent of the volume sold in this category. The price (per stamp) will be $0.85, up from $0.63 today for letters 0-30 g mailed within Canada.
• Businesses that use postage meters will pay a new discounted postal commercial rate of $0.75 (per letter 0-30 g).
• Mailers who prepare mail in such a way that reduces processing costs (known as Incentive Lettermail) will have prices that are lower than the proposed meter rate of $0.75 for 0-30 g.
• Single stamps will cost $1 each, up from $0.63 today. Canada Post estimates that only two per cent of all stamps are purchased as singles. The vast majority of stamp purchases will be at the rate of $0.85, which is available for a minimum purchase of a booklet or coil.
The pricing for U.S., international and oversized Lettermail and mail weighing more than 30 g will also increase in line with the newly established pricing levels.
Prices for parcels and for addressed and unaddressed advertising mail will not be affected.
Over the next five years, Canada Post will also phase out door-to-door delivery in urban areas. The move is expected to save $700 million to $900 million a year.
This is part of Canada Post's plan to cut down on costs as they continue to post heavy losses. In the latest quarter the crown corporation lost $104 million.