Canada Post to phase out home delivery in urban centres

by David Friend, The Canadian Press

Canada Post is making dramatic changes to its mail services beginning next year, part of a new plan that will see door-to-door delivery phased out and postage stamp prices soar.

And while some community organizations are rattled and the postal union is rallying to protect thousands of jobs, the news may barely interrupt the tweets and texts of most Canadians.

Rapid technology changes have reduced Canadians’ reliance on the postal service, making the traditional daily check for the letter drop almost unnecessary in 2013. Bill payments are made online, couriers deliver parcels and, at this time of year, email inboxes are more likely than mailboxes to be overflowing with Christmas greetings.

As a result, there may be a tepid response to the call by Canadian Union of Postal Workers union leader Denis Lemelin to “fight back” against widespread changes to the postal service and keep more of its workers employed.

“It’s a call to action for all the people to stand up and protect the postal service,” Lemelin said at an Ottawa press conference on Wednesday. “I think it’s time to have a large public debate around the future of this corporation.”

The financial situation for Canada Post has been bad for years as the Crown corporation tried to maintain a profitable business processing fewer letters, even as the number of Canadian addresses grows by about 200,000 locations each year.

In 2012, only about one-third of Canadians, or nearly 5.1 million people, received mail delivery to their door, costing an average of $283 per year for each address, according to the Canada Post annual report.

The rest of Canadians either visited a central location, like an apartment lobby, community mailbox, rural mailbox or delivery facility, which cost the corporation significantly less.

On Wednesday, Canada Post unveiled a five-stage plan that will help save up to $900 million a year. The federal Crown corporation plans to phase out home delivery within the next five years by replacing delivery on foot with community mail boxes, raise postal rates and cut thousands of jobs.

Canada Post spokeswoman Carley Smith noted that most postal carriers are concentrated in urban centres where businesses, in particular, receive letters delivered directly to their offices.

About 6,000 to 8,000 positions will be eliminated over the same time period, mainly through attrition, Canada Post said. The postal service expects nearly 15,000 employees to retire or leave the company in the next five years.

The staff cutbacks are not factored into its financial projections, although Canada Post said those savings will be “significant.”

Once the changes have been made, the postal carrier will have gone the way of the milkman and the community mailboxes that have become a mainstay of suburban neighbourhoods will soon be squeezed into urban centres.

“It’s not going to be a huge effect,” said Ken Wong, a marketing professor at Queen’s University.

“There will be a behavioural shift, obviously, we’re going to start going to a mailbox instead of getting it to our door, but frankly I’ve been doing that for 15 years now, and it’s certainly not a major problem.”

Canada Post also plans to increase the price of a stamp by 35 per cent to 85 cents when purchased in a booklet, starting on March 31. Stamps that are purchased individually will cost $1 each.

The popularity of stamps has been on the decline with the average Canadian household buying less than two stamps per month, Canada Post said.

Aside from the reduction in employees, the postal service expects to save $700 million to $900 million each year.

However, the changes will be a major setback for certain parts of the population, including disabled people and seniors.

“Door-to-door delivery remains a critical component for people with disabilities who have mobility issues in particular and would have trouble getting to a public mailbox,” said Laurie Beachell, the national coordinator at the Council of Canadians with Disabilities.

“Considering climate … anyone with a mobility problem would have to rely on somebody else to pick up their mail.”

The Canadian Association of Retired Persons said that seniors with mobility issues still want home delivery.

“I understand that you’ve got all these postal workers that cost (money) over time, but they should have thought of that before, when they realized the nature of their business was going to shift dramatically,” said Susan Eng, vice president for advocacy at CARP.

“They’ve created a crisis for themselves and this is the way they want to get out of it.”

Canada Post spokesman John Hamilton said the company has had community mailboxes for 30 years.

“In cases where there are mobility issues, we will ensure a box can be accessed that isn’t too high, and we will provide additional keys (for caregivers),” he said.

The company said it will start making the changes next year, with the first neighbourhoods being converted to community mailboxes in mid-2014.

“Canada Post has begun to post significant financial losses,” it said in the announcement.

“If left unchecked, continued losses would soon jeopardize its financial self-sufficiency and become a significant burden on taxpayers and customers.”

On Wednesday, Ottawa announced new regulations that relieve Canada Post from making special payments to reduce its $5.9-billion solvency deficit. Canada Post would have to make $1 billion in solvency payments next year.

The postal workers’ union said it doesn’t believe the pension plan is in jeopardy, and that concerns will be focused on wages as it looks towards the next round of negotiations.

“We’re going to go forward with a publicity campaign on this,” he said. “We don’t want to be negotiating in a confrontational point of view, but maybe in 2015 and 2016 there will be changes.”

The reaction from other political leaders has been mixed.

“Conservatives are destroying Canadians’ long-treasured postal services,” said New Democrat MP Olivia Chow. “These job-killing and service-cutting measures will isolate seniors, the poor and the disabled living in urban areas.”

Transport Minister Lisa Raitt said she supports the changes planned by Canada Post.

“In today’s digital age, Canadians are sending less mail than ever,” she said in a statement.

“I look forward to seeing progress as Canada Post rolls out its plan for an efficient, modern postal service that protects taxpayers and is equipped to meet Canadians’ needs now and in the future.”

Earlier this year, Maclean’s writer Charlie Gillis considered Canada Post’s future. “You don’t have to be a futurist to know snail mail is on the decline,” he wrote:

Since 2006, the amount of domestic letter mail delivered annually by Canada Post has fallen by more than one billion pieces, a 20 per cent slide that has cast one of the country’s cornerstone institutions into existential crisis. Its once lucrative “direct marketing” business—junk mail—has fallen off by nearly 15 per cent, while its share of the parcel business has flatlined in the face of competition from private courier companies, many of which had partnered with online retailers. (Canada Post’s own parcel service recovered a bit last year.)

Can Canada Post survive the digital era? Click here to read more. 




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Canada Post to phase out home delivery in urban centres

  1. Just further proof that when the “free market” is allowed to rule eventually you get less for paying more. That is the goal of every corporation is to give the customer less and less while they pay more and more. It is not evil or even wrong, especially from an owners’ or share holders’ perspective but this is what you get. The “free market” will not solve all our problems and certainly will make some of them such as income inequality, much worse. Competition does little to help, as small operators don’t stand a chance at start up. Just look how the Banks & Oil Companies keep giving us better deals because of “competition” Now we pump our own gas and do our own banking on line but costs to the consumer are up and the top executives get bigger bonuses.

    • You think we get less for more from private couriers? Try having a 5lb parcel delivered with Canada Post. They cost more and their service is much worse.

      The problem is that Canada Post was designed to handle letter-mail, which is all but non-existent now.

      Oh, and the “free market” never ruled postal delivery in Canada. Canada Post is still subsidized by taxpayers to this very day. The problem is that Canada Post can’t compete with the free market that exists despite Canada Post being subsidized to the tune of hundreds of millions of dollars. Would you actually try to make the argument that we’d be better off if Canada Post were allowed to have a complete monopoly over delivery of goods?

      • OK so Canada Post has to turn a profit according to it’s mandate but they have to supply mail door to door. No private company has to do that. Talk about unfair competition. It is amazing what you can do with price of a stamp. You missed the point. If you let the free market do its thing, which is what is happening to Canada Post, you pay more for less. That is the way of the free market. Try getting a private company to deliver that package to some more remote place. Guess what? They will use Canada Post and charge you a premium for being so dense.

        • I don’t see how you can say there’s a free market at work when Canada Post has a virtual monopoly.

          From http://www.postalconsumers.org/postal_freedom_index/Canada_–_Canada_Post.shtml

          ‘CanadaPost maintains a broad monopoly on mail service. Letters weighing less than 500 grams are subject to the national post’s monopoly. Magazines and books may be delivered by private firms. Private companies can deliver “letters of an urgent nature” if they charge at least three times Canada Post’s regular rate of postage for a 50-gram package’

        • What does this have to do with the free market? It’s a government-mandated monopoly, and will remain so. They’ve decided to cut back on a particular service which is now only available to certain grandfathered neighbourhoods anyway. Most people lving in subdivisions built since 1980 or so don’t get door delivery now. The only question is why it’s taken this long to go the centralized mailbox route for all neighbourhoods.

          • The free market part is the expectations of Canada Post to be profitable. They do have competition on the profitable sectors of the business. Meanwhile they try to maintain services to remote places and daily door to door services that no private company could or would do for that price. Private companies can cherry pick all the profitable routes and services. So therefore to due to free market pressures we will be getting less (no door to door) for more (higher postal rates)

        • No, no private company would have a legally mandate to do anything. Because that’s not a “free market”.

          It’s not amazing what you can do with the price of a stamp. No private letter carrier that existed in a free market would charge a dollar to deliver a letter 3 blocks over. Or even from Montreal to Vancouver.

          The entire problem with Canada Post is that they’re protected from competition, and thus have failed to compete with the private sector in the more profitable sector of package delivery. So Canada Post is the only company who can do letter delivery, and they’re protected from any competition. But they still can’t make a profit because they’re noncompetitive in the profitable sectors of their industry.

          And going forward, do you think there will be more or less demand for letter-delivery service?

          • When did the price for letter mail go up to a dollar? I think dropping a Birthday Card in a box on the street in say Cranbook and then a few days later it’s in Aunt Edna’s hands in Wetaskiwin Alberta for 63 cents is pretty amazing.
            Yes you can get a letter delivered any time 3 blocks over. It is called a courier and it costs about $10.00 on a regular which is basically all day to get there or twice as much or more for rush (4 hours) depending on the volume and deal you have with the courier company.
            Admittedly the times are changing and the demand for letter service is down and probably will continue to go down.
            I still get a lot of direct marketing (what a lot of people call junk mail) but I would rather have that than telephone solicitation, pop ups on the internet, spam on my email or billboards everywhere any day. It’s all recyclable by the way.
            I wonder why they can’t turn a profit on that? is it because too many people are allowed to refuse “junk mail”

          • Oh and that courier service, only available in urban centres where it is profitable to have such a thing. That is what you get with the free market. The point is the “free market” can’t do everything now can it?

          • As a rural dweller, don’t drag me into this. I understand that there are certain costs to doing business in rural areas. Paying a little bit more for letter and parcel delivery is more than offset by lower costs of living and an increased wage compared to our urban citizens.

            Taking tax money for subsidizing my mail delivery when every dollar can support those in need is unethical.

          • You get spam in your email? Upgrade your email server. Heck, get a gmail account, and you’ll be spam free, for free.

            Also, you aren’t seriously suggesting that we shouldn’t be allowed to refuse unsolicited mail are you? Do you care about the environment sir? Junk mail is a huge environmental waste. I think everyone should refuse their junk mail.

            Just for everyone reading this, make sure you tell Canada Post that you don’t want unsolicited mail. Put it on your mailbox, or ask Canada Post at your local post office that you don’t want junk mail in your box. It is the environmentally responsible thing to do.

          • So there you go A private company would tell you no door to door service unless you except unsolicited mail just like you can’t get TV without ads unless you pay more. But since Canada Post is a crown corporation we tie its’ hands and make it provide services that don’t pay for themselves and then complain it is not profitable.
            Paper comes from trees which in a properly managed forest is a totally renewable resource. Have you heard of FSC? Look it up on the net. That is the designation that the paper came from sustainable forests and was produced in environmentally responsible ways. Most paper in Canada has that designation.
            Junk mail is how local small business (and others including charities) reach out to their customer base. It employs the local printer. It is the profitable part of Canada Post.
            Paper is 100% recyclable.
            You would rather employ someone in a Call Centre in India?
            You must really hate our forest industry and your local merchant as well as Canada Post and their workers who also help keep your local economy going.

    • You make no sense, Ken. Honestly, this anti-free market rhetoric is getting out of hand. Yes, the goal is to rape people. Nice quotes around ‘free market.’ It’s the ‘free-market’ that creates wealth and jobs, Ken.

      • You obviously you have poor reading comprehension or you would see I make plenty of sense. You might not agree but they make sense. Tell me how is the free market making jobs here? I would say the loss of 8,000 jobs is going to have a negative effect. There is no true free market anyway, hence the quotes. The illegal drug trade is the closest thing we have to a truly free market. (think about it, other than being illegal, totally self-regulated, no outside or government controls or taxes at all) Wealth is not created out of thin air. The Earth is a finite place so therefore wealth is taken from someone else and/or the environment and/or future generations. I am not against capitalism, it is the best way to get many things done but without socialism, capitalism runs out of control because it is based on greed and you take away all the social benefits in our society just watch how fast the whole system collapses. It won’t be worth living in this country if people like you get your wish for a truly free market. I doubt you actually understand what a free market would really look like.

    • Another thing, Ken, Canada Post is a Crown Corporation. It’s a monopoly. We don’t have a ‘free-market’ in this industry or telecom or hydro for that matter.

      • Reread my posts and try to understand.

  2. I’m surprised it’s taken this long given email and so on….we’re down to parcel delivery really.

    Although why they always have to do this kind of thing at Xmas I don’t know. That’s Heinz, Kelloggs and the post office just in the last week. It doesn’t improve people’s view of capitalism for sure.

    • They probably make the announcements at Christmas as a concession to the Unions during negotiations. Exactly because, like you said, it gives people a negative view of capitalism at a very capitalistic time of year.

      • LOL I doubt it. Shutdowns are announced first, and any ‘negotiating’ left to do happens afterwards when unions are in a weak position.

        Plus Heinz buys from farmers under contract….and farmers aren’t unionized.

        However all of it could have waited until January.

  3. I’ve been without home delivery eight years now……..

    • Don’t worry. I’m sure that Tom Mulcair or Justin Trudeau will magically change that, if you only you just vote for them. I mean, look how the Liberals managed to magically get rid of the GST and the FTA after the 1993 election, because that’s just what they promised to do.

  4. I live in a community with super mailboxes. Three times last year the boxes were broken into and all mail was stolen. I think Canada Post should restore door to door delivery. Maybe they could save money by delivering every second day, thereby cutting delivery staff in half. I don’t need my mail every day but I need it to be secure and super mailboxes are not secure.

    • I would sooner move the mailboxes into a grocery or convenience store in your neighbourhood before I’d restore expensive door to door mail delivery.

      • But which grocery or convenience stores — who picks the winners and the losers, because the whatever store gets it will benefit from increased traffic, and will also have to be paid to manage the mail in a safe and secure and confidential environment.

  5. Hi folks, here’s something else to think about. I see nothing mentioned about what they are going to do with parcels. Are they still going to deliver them house to house? or will we have to go to the PO box to get them? If you are one of the many who shop on line from amazon or eBay or where ever you might have a problem as I find some sellers will not ship to a PO box. If it was not for all the online sales Canada Post could not operate.

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