As announced in December, Canada Post is introducing a new tiered pricing structure for domestic and international letters. The regulatory process has concluded and documents will soon be published in the Canada Gazette Part II.
On March 31, the price of Permanent (or “P”) stamps bought in booklets, coils and panes will be $0.85 per stamp, up from $0.63 today. “P” stamps are valid on standard letters 0-30 g mailed within Canada. A $0.22 stamp will be available as make-up postage for 0-30 g letters for those customers who wish to use previously purchased $0.63 stamps. Permanent stamps, identified with the letter P in place of a value, will continue to be accepted even if they were purchased at a lower price prior to the adjustment.
The typical Canadian household buys fewer than two stamps per month which means an estimated additional household cost of less than $5 per year.
Customers who wish to purchase a single stamp will pay $1. This represents about two per cent of all stamp purchases.
For commercial customers, the new pricing structure will be adjusted as follows:
• Businesses that use postage meters or indicia will pay a new discounted commercial rate of $0.75 (per domestic letter 0-30 g).
• Incentive Lettermail customers who meet volume and preparation requirements will benefit from significantly lower prices, at $0.70 for Machineable Lettermail and $0.69 for Presorted Lettermail (per letter 0-30 g).
• The pricing for U.S., international and oversized Lettermail will increase, falling in line with the new levels. However, the pricing for these services will not include uniquely differentiated prices for single stamps.
• For the average small business, the increase is estimated to be less than $55 a year in additional costs.
Canada Post is also introducing some temporary and permanent measures to support small businesses and charities. From March 31 to December 31, 2014, a 5-per-cent discount will be available for VentureOne cardholders who purchase a minimum of 300 Permanent stamps, in coils of 100 or more, in a single transaction. Meter customers will receive a 5-per-cent rebate on their Lettermail postage purchases during that time period up to a maximum rebate of $250.
To help small businesses and charities utilize direct mail to support their business in the long term, Canada Post is also permanently lowering the minimum volume requirements on some key products. This will provide them with access to lower postage rates for the distribution of their advertising and other materials. Details can be found at canadapost.ca/notice.
Canada Post says that the one-time strategic adjustment to Lettermail pricing was a difficult decision, but it was also a case of necessity. Lettermail volumes have fallen steadily since 2007, and that trend continues as more and more Canadians turn to digital and mobile alternatives. With a mandate to serve all 15.5 million addresses in Canada – a number that rises on average by 170,000 addresses a year, Canada Post must remain financially self-sufficient.
For $0.85, a customer can have a letter delivered across Canada, the world’s second-largest country, in four business days; a letter can be delivered within a province in three business days and within a city in two business days. This requires a costly, complex and customer-focused operation.
In December 2013, Canada Post announced a Five-point Action Plan to transform its business and preserve postal services for all Canadians, and the largest financial benefit of that plan will come from the initiatives that reduce operational costs.
However, these will take longer to fully implement, but this price adjustment offers an immediate and much-needed financial contribution.
In 2015 and beyond, annual pricing adjustments will return to levels that consumers and the mailing industry have seen in the past, reflecting inflation and operational costs.