Canada Post scraps door-to-door delivery

The national mail service says rising costs and falling mail volumes have made it impossible to continue its traditional operations.

The federal Crown corporation plans to phase out home delivery within the next five years, replacing foot delivery with community mail boxes.

Canada Post says says about 6,000 to 8,000 positions will be eliminated over the same time period, mainly through attrition.

The postal service expects nearly 15,000 employees to retire or leave the company in the next five years.

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About a third of Canadian homes still receive mail to their door, it said.

Canada Post also plans on raising the cost of stamps, a move that is unpopular with small business owners, says the Canadian Federation of Independent Business.

“These hikes will have a significant impact on many small businesses that use the mail to connect with customers or invoice and pay suppliers,” says Dan Kelly, CFIB president.

A CFIB survey of small businesses found 40% send at least 50 pieces of lettermail per month and 98% still use lettermail every month. It also found most supported ending door-to-door delivery as a way to keep costs down.

Canada Post’s announcement comes in the midst of the busiest time of year for postal outlets, which handle a dramatic rise in both letters and packages for the Christmas holiday.

But the company says its business model is unsustainable.

“Canada Post has begun to post significant financial losses,” it said in the announcement.

“If left unchecked, continued losses would soon jeopardize its financial self-sufficiency and become a significant burden on taxpayers and customers.”

Last month, Canada Post announced that it would ask Ottawa for financial relief next year to help support a restructuring of its business model and pension plan framework to assure long-term financial sustainability.

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“The company will continue to bring the cost of labour in line with its competitors through attrition and collective bargaining over time,” it added on Wednesday.

The postal service has faced intense competition from couriers, as well as technology that has led to a growing popularity of consumers paying their bills and communicating online.

In the third quarter, Canada Post reported an improved, but still big, pre-tax loss of $109 million for the period ended Sept. 28. The pre-tax loss in the comparable period a year ago was $145 million.

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