Canada Gazette, Part I, Volume 158, Number 6: Regulations Amending Certain Regulations Made Under the Canada Post Corporation Act
February 10, 2024
Statutory authority
Canada Post Corporation Act
Sponsoring agency
Canada Post Corporation
REGULATORY IMPACT ANALYSIS STATEMENT
(This statement is not part of the Regulations.)
Issues
The Canada Post Corporation Act (Act) requires Canada Post to provide quality postal services to all Canadians — rural and urban, individuals and businesses — in a secure and financially self-sustaining manner. Rates of postage must be fair, reasonable and, together with other revenues, sufficient to pay for Canada Post’s costs of operation. Under the Act, Canada Post has an exclusive privilege on the collection, transmission, and delivery of letters within Canada to meet its service obligations. These universal service obligations (USO) are set out in the Canadian Postal Service Charter.
Canada Post’s domestic and international rates for letters are an important source of revenue for the Corporation and are reviewed on a regular basis. The last series of increases took effect on January 13, 2020. Since then, annual growth of inflation has been the highest in over four decades. From 2020 to 2023, the consumer price index increased by 14.8%. In 2022 alone, Canada Post’s core business costs increased by almost $140 million, when compared to 2021.
While the Corporation has kept letter mail rate increases to a minimum for much of the past decade, the cost of providing a postal service to all Canadians has been steadily impacted by inflation. This fact, combined with the fact that each year there are fewer letters to deliver to more addresses, has put considerable financial pressure on Canada Post.
Objective
The objective of the proposed amendments to the Letter Mail Regulations, the International Letter-post Items Regulations and the Special Services and Fees Regulations is to help Canada Post respond to the impacts of inflation, while ensuring rates are fair and reasonable.
Description
Under the proposal, the price of an individual stamp for a domestic letter weighing 30 g or less would increase to $1.15 (up from $1.07). The rate for a stamp purchased in a booklet, coil or pane would increase to $0.99 (up from $0.92). Rate increases would also occur for other domestic weight steps, and United States and international letter-post items. The fee for domestic registered mail would also increase to $10.50 (up from $9.75).
| Domestic letter mail | Weight | Current rate | May 6, 2024 rate |
|---|---|---|---|
| 1. Single stamp | Up to 30 g | $1.07 | $1.15 |
| In booklets, coils or panes | Up to 30 g | $0.92 | $0.99 |
| 2. Standard letter mail | Over 30 g up to 50 g | $1.30 | $1.40 |
| 3. Other letter mail |
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| Letter-post to the United States | Weight | Current rate | May 6, 2024 rate |
|---|---|---|---|
| 1. Standard mail |
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| 2. Other | Up to 100 g | $3.19 | $3.43 |
| 3. Letter-post |
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|
| International letter-post | Weight | Current rate | May 6, 2024 rate |
|---|---|---|---|
| 1. Standard mail |
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| 2. Other | Up to 100 g | $6.39 | $6.88 |
| 3. Letter-post |
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Regulatory development
Consultation
The Act requires a consultation period through publication of each regulatory proposal in the Canada Gazette. All representations must be sent to the Minister of Public Services and Procurement within 30 days after the prepublication of the proposed Regulations. The representations will be taken into consideration in the preparation of the final regulatory proposal.
Modern treaty obligations and Indigenous engagement and consultation
Indigenous Peoples may be impacted by this proposal. Canada Post has sought to minimize the impact by proposing modest rate increases.
Instrument choice
Given that letter mail, letter-post to the United States and other international destinations, and domestic registered mail are regulated, any change to these rates must be made through a regulatory amendment.
Regulatory analysis
Benefits and costs
The revenue generated from the proposed rates would help offset rising costs that are a result of inflation and would contribute toward the provision of postal services to all Canadians.
In May 2024, the price of a single stamp for letter mail weighing 30 g or less would increase to $1.15 (up from $1.07), representing an increase of 7.5%, while the price for a stamp purchased in a booklet, coil or pane would increase to $0.99 (up from $0.92), representing an increase of 7.6%. The fee for domestic registered mail would also increase from the current price of $9.75 to $10.50 in May 2024. All other regulated prices would increase by approximately 7.6%.
The impact of these proposed rate increases across all products for the average Canadian household is estimated at $0.65 per year, based on an average annual expenditure on postage of $9.22. The proposed regulated rate increases would generate approximately $23.8 million of additional gross revenue for Canada Post from May 2024 to April 2025.
The cost-benefit calculation reflects Canada Post’s projected increase in the number of addresses delivered to and the decrease in letter mail volumes, which are based on historical trends.
Cost-benefit statement
As stated above, the benefit of this proposed rate adjustment is increased revenue for Canada Post, while the cost is increased prices paid by Canadians for postage.
- Number of years: 10 (2024 to 2033)
- Base year for costing: May 2024–April 2025
- Present value base year: 2024
- Discount rate: 7%
| Impacted stakeholder | Description of impacts | Base year (May 2024–April 2025) | Mid year (2028) |
Final year (2033) | Total (present value) |
Annualized value |
|---|---|---|---|---|---|---|
| Canadians | Higher price for product | $23.8 | $17.9 | $10.9 | $121.9 | $17.3 |
| Canada Post | Increased revenue | $23.8 | $17.9 | $10.9 | $121.9 | $17.3 |
| NET IMPACT (all stakeholders) | n/a | $0 | $0 | $0 | $0 | $0 |
| Type of impact | Stakeholder | Description |
|---|---|---|
| Positive impacts | Canada Post | Contribute toward the provision of postal services to all Canadians; enable ongoing innovation and the long-term financial sustainability of Canada Post. |
| Negative impacts | Canadians | Annual impact of $0.65 for consumers and $12.07 for small businesses. |
Detailed information is included in the cost-benefit analysis report, which is available upon request to the contact below.
Small business lens
The total increase in mailing costs for small businesses that use stamps to pay postage is estimated at $12.07 per year, based on an average annual expenditure of $170.16.
Small business lens summary
- Number of small businesses impacted: 1.2 million
- Number of years: 10 (2024–2033)
- Base year for costing: April 2024–May 2025
- Present value base year: 2024
- Discount rate: 7%
| Totals | Annualized value | Present value |
|---|---|---|
| Total cost (all impacted small businesses) | $14,484,000 | $101,730,000 |
| Cost per impacted small business | $12.07 | $84.77 |
One-for-one rule
The proposed amendments would not result in additional administrative burden costs for business, and the one-for-one rule would therefore not apply.
Regulatory cooperation and alignment
The proposal is not related to a work plan or commitment under a formal regulatory cooperation forum.
Strategic environmental assessment
In accordance with the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, a preliminary scan was conducted; it concluded that a strategic environmental assessment is not required.
Gender-based analysis plus
The regulatory proposal recommends modest increases to Canada Post’s regulated rates. When gender-based analysis plus (GBA+) considerations are taken into account, analysis of buying patterns suggests that there may be a slightly greater impact on those living in rural, remote and Indigenous communities, as well as on seniors (individuals aged 65 and over).
While more Canadians are accessing services online, Indigenous communities and those living in rural and remote areas may be more reliant on Canada Post’s regulated postal products than those living in urban centres, as rural and remote areas have a lower percentage of households with Internet access at home. Seniors — whose intensity of Internet use is lower — may also be more reliant on these regulated products. Canada Post anticipates the impact to be minimal; however, the proposed rate increase could have a greater impact on these groups.
Implementation, compliance and enforcement, and service standards
Implementation
Regulations are enforced by Canada Post under the Act. No change in the cost of enforcement is expected as a result of the proposed amendments.
Service standards
The Canadian Postal Service Charter includes service standards for domestic Lettermail delivery. Canada Post reports on its performance against these service standards each year in its annual report.
Contact
Lisa Hoskins
Director
Regulatory Affairs
Canada Post Corporation
2701 Riverside Drive, Suite N1150D
Ottawa, Ontario
K1A 0B1
PROPOSED REGULATORY TEXT
Notice is given, under subsection 20(1) of the Canada Post Corporation Act footnote a, that the Canada Post Corporation proposes to make the annexed Regulations Amending Certain Regulations Made Under the Canada Post Corporation Act under subsection 19(1)footnote b of that Act.
Interested persons may make representations concerning the proposed Regulations within 30 days after the date of publication of this notice. They are strongly encouraged to use the online commenting feature that is available on the Canada Gazette website but if they use email, mail or any other means, the representations should cite the Canada Gazette, Part I, and the date of publication of this notice, and be sent to the Minister of Public Works and Government Services, House of Commons, Ottawa, Ontario K1A 0A6.
Canada Post Corporation
Regulations Amending Certain Regulations Made Under the Canada Post Corporation Act
Special Services and Fees Regulations
| Item | Column II Rate |
|---|---|
| 1(1)(a) | $10.50 |
International Letter-post Items Regulations
| Item | Column II Rate per item ($) |
|---|---|
| 1(a)(i) | 30 g or less 1.40 |
| more than 30 g but not more than 50 g 2.09 | |
| (ii) | 100 g or less 3.43 |
| more than 100 g but not more than 200 g 5.99 | |
| more than 200 g but not more than 500 g 11.99 | |
| (b)(i) | 30 g or less 2.92 |
| more than 30 g but not more than 50 g 4.17 | |
| (ii) | 100 g or less 6.88 |
| more than 100 g but not more than 200 g 11.99 | |
| more than 200 g but not more than 500 g 23.97 |
Letter Mail Regulations
| Item | Column 2 Rate |
|---|---|
| 1(1)(a) | $1.15 |
| (b) | $0.99 |
| Item | Column 2 Rate |
|---|---|
| 1(2) | $1.40 |
| Item | Column 2 Rate |
|---|---|
| 2(1) | $2.09 |
| (2) | $3.43 |
| (3) | $4.78 |
| (4) | $5.48 |
| (5) | $5.89 |
Coming into Force
5 These Regulations come into force on May 6, 2024.
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