Canada Post Ends Door-To-Door Delivery In Some Urban Areas, Hikes Stamp Costs

It’s nice to know that your neighbors are having similar problems to yours, even if their solutions are different. The current problems of Canada Post that involve pension funding and the expense of dropping mail on every doorstep are very similar to our experiences down here in the United States. Their solution is one that our postal service down here has pondered, too.

The plan is to phase out door-to-door mail delivery in urban areas. Yes, forcing postal customers to leave their homes and pick up their mail at a post office or community mailbox (CMB).

Canada Post estimates that it costs $269 per year to deliver to a home mailbox, versus $117 to deliver to a box. (All figures in this story are in Canadian dollars, but the CAD-USD exchange rate is pretty much one to one right now.)

The postal service plans to phase out urban mail delivery over the next five years. About ten million people currently use CMBs, and the new plan will make the total fifteen million.

Along with the announced cut in service will come a rate hike: individual stamps will now cost $1, but only 85¢ when purchased in a book. They currently cost 63¢.

Canada Post and the USPS have a lot in common: both are self-supporting government corporations with huge pension funding responsibilities that they’re struggling to meet.

About 6,000 postal workers will lose their jobs over the next few years due to the change to CMBs.

Canada Post to phase out urban home mail delivery [CBC]

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  1. Edmunddantes says:

    I hate stories like this that give no context to the USPS problem with their pension.

    They are having problems with it and running a deficit because Congress decided the Post Office had to run in a way no business does when funding their pension.

    It required that the USPS fully fund their pension for the next 75 years, and they had to do it almost immediately. It can’t invest it in anything but government bonds (unlike Private businesses)

    Thus a huge part of the USPS budget problem is a line item that no other company has to deal with. It is also a line item that will soon decrease dramatically once they meet the requirement.

    However in the short term, those huge deficits can be used as cudgel of “it’s so broken, look how much money they are losing” to make reforms people would never accept in other circumstances.

    The same trick is played with other budget items and deficits, but this is an argument for a different time.

    • cvee says:

      Well, there’s also the issue that Congress interferes with USPS being able to manage themselves and do what is necessary to stay in business. Right now it’s “You can’t cut service and you can’t raise rates, figure it out”