Tiered stamp prices, community mailboxes for all, and labor cost cuts are the most noteworthy elements of Canada Post

Canada Post Ending Urban Home Delivery

The company released a five-point action plan Dec. 11 that will transition Canadian households that still receive mail at their doors to community mailboxes during the next five years. The plan allows attrition to reduce its employment by up to 8,000 positions.

Canada Post on Dec. 11 released a five-point action plan intended to reduce costs and make it competitive during the era of declining mail volumes. The plan "means Canada Post can return to financial sustainability by 2019," according to its summary. Canada Post and its subsidiaries had about 68,000 employees – making it one of the country's largest employers -- as of Dec. 31, 2012, and delivers about 10 billion pieces of mail annually, according to its latest annual report, which says the organization posted a $131 million loss in 2013's third quarter and a $272 million loss during the first three quarters of this year. The comparable 2012 numbers were a $160 million 3Q loss and a $330 million loss during the first three quarters of 2012.

The change that will be most apparent to the Canadian public is the decision to end urban home mail delivery. One-third of Canadian households still have their mail delivered to their door, but these will be transitioned during the next five years to community mailbox delivery. Canada Post also will introduce a new tiered pricing structure for its equivalent of first-class mail, with the stamp price changes taking effect March 31, 2014.

The plan says Canada Post must cut its labor costs, which it already has been working on through negotiations with its main labor union. New hires are enrolled in a defined contribution plan rather than a defined benefit (pension) plan, and they and Canada Post contribute equal shares to that defined contribution plan.

Still, the action plan requires further reductions in Canada Post's labor costs and an overall reduction of 6,000 to 8,000 positions, which it says will be accomplished through attrition because the company expects nearly 15,000 employees to retire or leave during the next five years.

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