June 28, 2005 15:00 ET

Canada Post Announces One-Cent Domestic Rate Increase For 2006

OTTAWA, ONTARIO--(CCNMatthews - June 28, 2005) - Canada Post Corporation today announced in the Canada Gazette a one-cent increase (2 %) in the domestic basic letter rate as well as its proposed increases for USA and International letter rates for implementation on January 16, 2006.

Under the price-cap formula approved by the federal government in 2000, basic letter rate increases, when warranted, will not exceed 66.67 percent of inflation as measured by the Consumer Price Index from May prior to the last increase to May of the current year. Increases will be implemented no more than once a year, in January, and announced six months in advance in the Canada Gazette Part I.

The Consumer Price Index from May 2004 to May 2005 shows an increase of 1.6 per cent. Under the price-cap formula, 66.67 per cent of the CPI increase plus the unused portion related to the January 2005 increase, permits a one- cent increase in the basic letter rate. Even at the new rate of 51 cents, Canadians will still enjoy one of the lowest domestic basic letter rates among industrialized nations.

Canada Post announced in the Canada Gazette Part 1 the following proposed rate adjustments that will come into effect January 16, 2006.

- $0.04 increase to $0.89 for letters, cards and postcards up to 30g destined for the USA;

- $0.04 increase to $1.49 for letters, cards and postcards up to 30g to foreign destinations.

Canada Post's proposed rates for a 30-gram letter to the USA and other International destinations compare favourably to the rates other countries charge to send a similar piece of mail to Canada. It costs $2.50 from Great Britain, $3.23 from Germany and $1.72 from Australia to send a 30-gram letter to Canada. The cost to mail a 30-gram letter from the USA to Canada is $1.11.

Rate increases are necessary to keep pace with inflation, direct operating costs and the need to reinvest in network infrastructure to meet customer demands. Fuel costs, for example, have risen 10 per cent since 2003.

Another source of increased cost is terminal dues, a pricing mechanism that allows the postal administration receiving mail for delivery to collect for the cost of delivery from the postal administration sending the mail (in this case Canada Post). Terminal dues to the United States and other destinations are expected to increase by 2006.

Detailed information on these and other proposed rate changes is available in the Canada Gazette Part 1. Canadians have 60 days in which to make representations to the Minister Responsible for Canada Post regarding the proposed rate increases.

Contact Information

  • Canada Post
    Media Relations, Ottawa
    (613) 734-8888