Canada Post: Judge OKs class action suit over postal charges

Canada Post could be required to return tens of millions of dollars in shipping charges to thousands of businesses as a result of a recent Ontario court ruling.

Superior Court Justice Joan Lax certified a class-action proceeding initiated by Ottawa-based Lee Valley Tools Ltd., which has been embroiled in a long-running dispute with the Crown corporation about its charges for shipping parcels to customers.

The ruling noted there are more than 57,000 commercial clients that could have a claim against Canada Post, if its billing practices for parcels are found to violate the federal Weights and Measures Act.

For the past seven years, Canada Post has charged customers to ship parcels based on the greater charge of the actual weight or the “volumetric weight” of an item. This is so that the charges on lightweight yet bulky items cover the cost of transportation.

Since 2003, the Crown corporation has used a device known as a “cubiscan,” which Lee Valley has alleged can overstate the volume of objects, especially irregularly shaped parcels, by as much as 20 per cent.

Commercial clients are required to pre-pay and weigh their products and if Canada Post determines that the total was underestimated, it levies an addition charge. Until January 2007, it did not refund any overpayments to customers.

John Caines, a spokesman for Canada Post, described the class-action certification as a “procedural” ruling. “We deal with all of our customers fairly and in the same way,” Mr. Caines said. “This is the way the industry measures parcels.” He added that Canada Post is the only company now issuing credits for overpayments.

Enforcement of the Weights and Measures Act is the responsibility of Measurement Canada, part of Industry Canada. Alan Johnston, president of Measurement Canada, responded in December 2005 that the relevant section of the Act did not define a “proscribed limit of error” for shipping charges, so it could not be enforced.

Canada Post could be required to return tens of millions of dollars in shipping charges to thousands of businesses as a result of a recent Ontario court ruling.

Superior Court Justice Joan Lax certified a class-action proceeding initiated by Ottawa-based Lee Valley Tools Ltd., which has been embroiled in a long-running dispute with the Crown corporation about its charges for shipping parcels to customers.

The ruling noted there are more than 57,000 commercial clients that could have a claim against Canada Post, if its billing practices for parcels are found to violate the federal Weights and Measures Act.

For the past seven years, Canada Post has charged customers to ship parcels based on the greater charge of the actual weight or the “volumetric weight” of an item. This is so that the charges on lightweight yet bulky items cover the cost of transportation.

Since 2003, the Crown corporation has used a device known as a “cubiscan,” which Lee Valley has alleged can overstate the volume of objects, especially irregularly shaped parcels, by as much as 20 per cent.

Commercial clients are required to pre-pay and weigh their products and if Canada Post determines that the total was underestimated, it levies an addition charge. Until January 2007, it did not refund any overpayments to customers.

John Caines, a spokesman for Canada Post, described the class-action certification as a “procedural” ruling. “We deal with all of our customers fairly and in the same way,” Mr. Caines said. “This is the way the industry measures parcels.” He added that Canada Post is the only company now issuing credits for overpayments.

Enforcement of the Weights and Measures Act is the responsibility of Measurement Canada, part of Industry Canada. Alan Johnston, president of Measurement Canada, responded in December 2005 that the relevant section of the Act did not define a “proscribed limit of error” for shipping charges, so it could not be enforced.

The class-action certification means only that the court proceeding can go ahead to determine whether Canada Post violated the act and should refund money to its customers.

Unless there is a settlement, it may be many months or even years before there is a trial on the issue. “It is the first step in a long journey,” Mr. Lee said.