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Canada Post to raise postage rates 4.3% in January 2013

Friday, June 1st, 2012

Canada Post is set to increase its postage rates again in January 2013, with the price for sending a domestic letter rising by two cents to 63 cents.

Price changes will take effect from 14th January, continuing the Corporation’s strategy to increase rates steadily over a five-year period from 2009.

The two-cent increase for domestic letters applies to items under 30g in weight, with a five-cent increase planned for items weighing between 30g and 50g, to $1.10 per piece.

Other domestic letter weight categories will see price increases of between four and 10 cents per piece.

Domestic registered mail services will see a 25-cent (3%) hike to $8.50.

Canada Post said its international services for letters, cards and postcards up to 30g will see a five-cent increase, to $1.10 for items going to the US, and to $1.85 for other destinations.

The 2013 price increases represent a weighted average increase of 4.3% for domestic letters, 4.3% for US-bound mail and 2.9% for other international letters.

Canada’s inflation in 2011 was 2.9%, as measured by the Consumer Price Index, and is expected to be 2% in 2012. The price rise also reflects a 5% increase in Canada Post’s operational costs last year.

The Corporation said increasing its prices was necessary to ensure it could maintain its postal delivery to more than 15m addresses across the country, with services paid for by its customers, rather than by taxpayer-funded government support.

Canada Post recorded a $253m loss before tax last year, its first annual loss for 17 years.

Impacts

The company said proposed price increases were reflective of its operational costs, but argued that Canadian domestic letter rates would continue to compare favourably with rates in other industrialised countries.

“The proposed increases would have a minimal impact on Canadian households – an estimated 15 cents per year for domestic lettermail. The impact for a small or medium-sized business is estimated at close to $5 per year for domestic lettermail,” the Corporation said in a statement.

Large Canadian businesses that mail millions of pieces a year could expect mailing costs to rise by about $2,600 per year for letter mail, $350 for international letters and $158 for domestic registered mail, according to the Corporation’s cost analysis.

Canada Post noted that its customers could purchase its “Permanent” stamps prior to January 14 to continue sending letters after that date at this year’s rates.

Under Canada Post’s five-year pricing strategy, similar price increases are anticipated for 2014, with the basic rate for standard letters up to 30g expected to increase an additional two cents, to 65 cents.

Source: Post&Parcel/Canada Post

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