Canada Post is proposing to increase postage rates in 2016 as declining mail volumes continue to have a significant impact on its financial situation.
Canada Post proposes to increase the postage rate for domestic lettermail items weighing 30 grams or less when purchased in a booklet, coil or pane to 90 cents from the current rate of 85 cents. The price of a single stamp would remain $1. The rate change would take effect on Jan. 11, 2016 and replace rates that will have been in effect for 21 months.
Lettermail volumes have been declining for almost a decade. In 2014, Canada Post delivered 1.4 billion fewer pieces of domestic lettermail than in the peak year of 2006. Some of the biggest declines have occurred in 2015, accelerating the erosion of Canada Post’s core business. As mail volumes fall, the number of addresses served also rises every year, affecting Canada Post’s cost of doing business.
The corporation states it is “taking every action necessary to secure postal service for all Canadians and to avoid becoming a drain on taxpayers.” It is proposing these new postage rates to “help achieve its long-standing mandate of remaining financially self-sufficient.”
Canada Post estimates the average Canadian household purchases fewer than two stamps a month, while the typical small business purchases fewer than 250 stamps per year.
Canadians can avoid the cost increase by purchasing permanent stamps at the current rate of 85 cents in advance of the proposed rate changes coming into effect. Permanent or “P” stamps always retain their value and are valid postage regardless of when they were purchased.
Canada Post is also proposing to increase rates for other domestic lettermail, U.S. and international letter-post items and domestic registered mail.
The rate changes are one of several actions the corporation is taking to achieve financial self-sufficiency. In December 2013, Canada Post announced its Five-point Action Plan to transform its business and preserve postal service for all Canadians. As part of the plan, Canada Post introduced a new tiered pricing structure for domestic lettermail that provided discounts to customers who purchase stamps in booklets, coils or panes.
