Ottawa, Ontario – Canada Post will be phasing out door-to-door delivery in favour of community mailboxes as part of a new business model to try to stop bleeding money.
Canada Post announced the changes Wednesday. It’s the latest service cut from the Crown corporation, which has faced major financial losses in the past few years thanks to the proliferation of e-mail and other technologies.
The volume of letter mail has been in free fall and Canada Post expects the trend to continue.
“The new system will allow Canada Post to compete in the fast-paced and technology-driven global parcel market,” the new business plan states.
“It will level the playing field for small businesses and other emerging industries looking to embrace e-commerce and to grow.”
The shift to community mailboxes will affect the roughly five million Canadians in mostly urban areas who still get door-to-door delivery. The changes will be phased in over five years, beginning in late 2014.
The cost of stamps will go up as of March 31, with individual stamps costing $1 and a roll of stamps costing $0.85 per stamp.
The new business model also calls for job cuts. Canada Post says its current labour costs are “simply not sustainable.”
Canada Post expects to reduce its unionized workforce by 10% over the next 10 years, largely through attrition.
It also plans to cut management by 18% and reduce pension plan costs.
“A leaner workforce will create a more flexible and competitive Canada Post, able to respond quickly to the changing marketplace,” the company says.
It will also expand its footprint of postal outlets and streamline internal operations to cut costs.
Canada Post lost $109 million in its last quarter and expects significant losses this year.
The Crown Corporation hopes to return to financial sustainability by 2019. (SUNNETWORK)