First rate increase since 2014 sees domestic stamps climb five cents

The cost of an individual stamp for a domestic letter will climb five cents, from $1 to $1.05, effective Jan. 14.

The amendments, which also increase the rates of postage for U.S. and international letter mail as well as domestic registered mail, are the first rate increases since March 2014.

The cost of sending letters to the U.S. will increase between seven and 20 cents while overseas mail will climb from 15 cents to 20 cents.

“Given the current rate at which letter mail volumes are declining and the other financial pressures faced by Canada Post, it may no longer generate sufficient revenue to meet its service obligations in the future without regular changes in its rate structure,” reads a recent article in the Canada Gazette (Vol. 152, #26), which is a government publication that outlines new federal rules and regulations.

The amendments will increase the overall annual spending on postage by about $26 million, according to Canada Post, which added there will be “a corresponding increase in revenue for the Corporation.”

“Letter mail is eroding on account of electronic substitution and recent history has demonstrated that price increases, or lack thereof, have no appreciable impact on its level of use.”

The Crown corporation also estimates the impact of the rate increases on the average Canadian household will be 65 cents in 2019. The impact on the average small business that uses stamps to pay postage will be about $14.21 based on an average annual expenditure of $257.32.

DECLINING MAIL VOLUMES

Letter mail volume has nearly halved since 2006 with a loss of about two billion letters a year in that time.

Late last year, Canada Post released its third-quarter financial report, which explained the Crown corporation is expected to finish its fiscal year with a loss. It claimed the loss was mostly due to a 25 per cent pay increase for suburban and rural postal employees.

Last year also saw five weeks of rotating strikes, which affected virtually all major city centres and all addresses in Canada; however, back-to-work legislation was passed in late November after Canada Post said the backlog of mail and parcels would diminish its delivery standard through the holidays.

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