Canada’s struggling postal service to end home deliveries in urban centres

PUBLISHED : Thursday, 12 December, 2013, 9:56pm
UPDATED : Friday, 13 December, 2013, 3:07am


Canada's postal service will phase out home delivery in urban centres within the next five years as it begins to post significant financial losses due to growing use of digital communication.

Canada Post said it would replace foot delivery with communal mail boxes. About a third of Canadian homes still receive mail to their door, as opposed to communal mail boxes.

A Conference Board of Canada study estimated savings of US$540 million a year by eliminating door-to-door delivery to urban homes.

It also plans to eliminate 6,000 to 8,000 jobs, mainly through attrition. The postal service expects nearly 15,000 employees to retire or leave the company in the next five years. Canada Post employed 68,000 last year.

The company's core mail operations have been losing hundreds of millions of dollars.

Canada Post said if left unchecked, continued losses would soon jeopardise its financial self-sufficiency and become a significant burden on taxpayers and customers.

"What Canadians expect from their postal system is changing dramatically. That requires an equally dramatic change in the size, structure and direction of Canada Post," it said.

Last month, Canada Post announced that it would ask the Canadian government for financial relief next year to help support a restructuring of its business model and pension plan framework to assure long-term financial sustainability.

The postal service has faced intense competition from couriers, as well as technology that has led to the growing popularity of consumers paying their bills and communicating online.

A think tank commissioned by Canada Post this year warned the service was on track to lose C$1 billion a year by the end of this decade.