Canada Post 'needs innovation' not cuts

Canadian Union of Postal Workers National President Denis Lemelin gestures during a news conference in Ottawa 11 December 2013 "We are sure that we are not alone" in opposing Canada Post's plan, labour union president Denis Lemelin said

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Critics have said Canada Post's move to phase out home delivery over five years is the wrong way to turn around the agency's financial struggles.

The change, along with an increase in the cost of stamps and as many as 8,000 job cuts, was introduced on Wednesday.

Labour unions and opposition legislators have said the agency needs to focus instead on making money.

The service faces a projected 1bn Canadian dollar ($943m; £576m) loss by 2020 without "fundamental changes".

Canada Post lost C$73m in the third quarter of the current fiscal year, CBC News reported. The postal service put the declining revenue down to the rise in digital communications.

'Not the way'

Direct-to-the-home delivery will be replaced by community post boxes installed throughout residential areas, Canada Post said in its plan.

The agency said two-thirds of Canadians, mostly in newer suburban neighbourhoods and rural areas, already receive their mail through this method. It will also open more retail locations across Canada in the next five years.

The postal workers' labour union said it would fight the home delivery change.

"We recognise that Canada Post needs to change, but this is not the way to change: to cut, cut and cut," Denis Lemelin, president of the Canadian Union of Postal Workers, told reporters.

Mr Lemelin suggested the agency could change its financial fortunes through innovation, including schemes where post offices offer basic banking services.

New Democratic Party MP Olivia Chow supported such an idea, saying some European countries were making money from postal banking.

Ms Chow said Canada Post would be ending a "long-treasured tradition" of door-to-door mail service.

Another NDP MP, Peter Julian, said the change would hurt older people who did not have caretakers or nearby family to retrieve mail from community boxes.

In addition to ending direct-to-the-home delivery, Canada Post will raise the cost of postage stamps purchased in bulk to $0.85 per stamp, up from $0.63 today, among other price rises.

In all, the plan will return the agency to financial sustainability by 2019, Canada Post said in a report, citing annual savings of up to C$900m.

Between 6,000 and 8,000 jobs will be eliminated as part of the plan - 12% of Canada Post's employees, although it says its workforce is ageing and it expects almost 15,000 workers to retire or leave the company in the next five years.

Canada Post delivers close to 10 billion letters and parcels each year but has seen a 24% drop in letters delivered since 2008.

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