Canada Post is increasing the prices of stamps and other postal products by 25 per cent today. The measures were announced in September, well before a 30-day labor strike further challenged the organization’s already dire financial situation.
Experts say raising prices is both risky and ineffective.
The Crown Corporation said stamps purchased in booklets, coils or sheets, which make up the majority of stamp sales, will cost between $0.99 and $1.24 each. such a price increase receive legislative approval in advance.
A spokesperson said the changes are “necessary to better balance stamp prices with the rising cost of providing letter services to all Canadians.” Canadian stamp prices are among the lowest in the world, the spokesperson added.
Canada Post has reported millions of dollars in losses since 2018, and the Crown corporation said it could run out of money within a year. Is there any way to save it?
“I don’t know if it will be banned, but there is a possibility that it will be banned.” [disincentivize] Please send some to people,” Windsor resident Karen McCormick said. She says she rarely sends emails anymore.
“It’s kind of weird that they go up…what difference does it make?”
Canada Post expects the new fees to generate approximately $80 million in additional annual gross revenue in 2025.
But this number pales in comparison to the $3 billion the company has lost since 2018. Rising shipping costs and Canada’s growing population are contributing to the financial stress, the company said. Canada Post’s mandate is to deliver to all addresses within the country.
The company reported a quarterly loss of more than $300 million in November, due in part to the company’s continued decline in its share of the parcel market and the financial impact of the strike. It is said that Workers have returned to work but are still negotiating with unions for a new agreement.
“It’s going to be a completely different organization.”
Canada Post has long held a monopoly on letters, but the Crown corporation itself said its share has declined by 60 per cent over the past 20 years. Since the pandemic, market share in the lucrative parcel delivery business has been eroded by private couriers that rely on low-cost labor and delivery giants such as Amazon.
The price increases mean that “it’s a bit of a risky path for Canada Post to go down this path of competing one-on-one with other providers, because fundamentally it’s not going to be as profitable as other providers. ” said Sherena Hussain, a lecturer at York University’s Schulich School of Management.
It’s not yet clear whether the labor dispute led to Canada Post losing customers.
But “that market share is contested, and even in the days before Canada Post, some low-cost companies were able to provide the service and establish a form of trust.” Hussein said.
“That being said, their rates were typically higher than Canada Post.”
Ian Lee, a business professor at Carleton University who studies postal services, said Monday’s expected price increases are a “band-aid” solution and won’t solve Canada Post’s problems.
“There is a future. It’s going to be a completely different organization. It’s going to be much smaller,” he said.
He said a future Canada Post would be taxpayer-subsidized and would be used primarily in rural and remote communities, areas not served by private commercial couriers, which tend to be concentrated in Canada’s metropolitan areas. It added that it may provide services.
Lee said there could also be a scenario where Canada Post would deliver directly to independent franchises in grocery stores and pharmacies, rather than directly to home addresses.
“Loblow and the Shoppers” [Drug Mart] “And corner stores are going to compete aggressively for those franchises because they have a guaranteed customer base,” he said.
“There will be a reorganization. The only question is when, to what extent, and what proposals will be made for the reorganization.”
