OTTAWA, 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.
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For further information:
Media Relations
Ottawa
(613) 734-8888
