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Canada Post: Mail volume, costs, and other quick facts

12/11/2013 01:18 EST | Updated 02/10/2014 05:59 EST
The announcement that Canada Post will phase out urban home delivery, raise the price of stamps and cut thousands of jobs is the culmination of how Canadians needs for the postal service have evolved over its 250 year history, particularly over the last few years. Here a number of Canada Post quick facts, looking at its history, mail volumes, costs, profits and losses.

History

While legislation officially created Canada’s uniform postal system back in 1868, the first Canadian post office opened in in 1753 in Halifax  — to link Atlantic colonies with Britain.

The post office was was opened by U.S founding father Benjamin Franklin, who at the time was the Philadelphia Postmaster. 

A Canadian commemorative stamp issued June 10, 2013, recognizing 250 years of postal history featured Franklin, raising some eyebrows and stirring some controversy especially among those who did not know the relation Franklin had with Canada's postal service.

When Canada’s first railway line was built in 1836, it quickly was adopted as a way to move mail faster and farther.

In 1867, after Confederation, postal systems from Halifax to Fort William (on Lake Superior) amalgamated.

Volume of mail

Canada Post serves 15.1 million addresses but only one-third of Canadians, or about five million homes, get their mail delivered to their door. Everyone else picks it up from community, apartment or rural lot line mailboxes.

It costs Canada Post, on average, about $168 per address, with the breakdown:

- Door to door (one third) - $283 per address

- Centralized point (apt., lobby lockbox) (one quarter) - $127 per address

- Group/community mailbox/kiosk (one quarter) - $108 per address

- Delivery facility (postal box/gen delivery)  (12%) - $59 per address

- Rural mailbox (5%) - $179 per address

In 2006, Canada post delivered about five billion pieces of domestic lettermail. But by 2012, that volume had dropped to around four billion, with 30 per cent of that decline occurring in 2012 alone (From 2011-2012, there were 255 million fewer pieces of mail.)

Although the number of addresses Canada Post delivers to grew by 845,000 from 2007 to 2012, the number of pieces of mail delivered has decreased dramatically each year: (23.6% from 2008-2012)


The amount of mail delivered within Canada in 2012 was already down by 6.4 per cent compared to the year before. Canadians mailed almost one billion fewer pieces of domestic mail in 2012 than in 2006, but most of that decline happened in 2012.

Transaction mail, which includes letters, bills and statements and which accounts for half of Canada Post's revenue, was down by 51 million pieces, or 6.3 per cent, in the second quarter of 2013, compared with a year earlier. 

However, Canada Post said its parcel delivery business grew because of the popularity of online shopping. In Canada, volumes in the second quarter were up by 5.1 per cent, compared with a year ago. 

A Conference Board of Canada report in April, which was commissioned by Canada Post, estimates that the postal system's total volume of mail will drop by more than 25 per cent within the next seven years.  Only parcel volume is expected to rise as e-commerce continues to grow in popularity. But the report says the growth in parcel business will not make up for the loss in revenue from other lines of business.

The report also stated that almost half of all Canadian households send no more than two pieces of mail each month.

Costs, revenue, profits and losses

Canada Post recorded profits for 16 consecutive years until 2011. It has reported losses for nine consecutive quarters.

Revenue in 2012 fell 1.9 per cent to $1.7 billion from $1.8 billion in the 2011 period. This loss comes after a 25-day labour disruption and pay equity court settlement estimated at $250 million.

In the first three quarters, revenue dropped $20 million compared to the same time frame last year. The latest Canada Post financial data show it lost $73 million in this fiscal year's third quarter compared to the same quarter in 2012.

The Conference Board of Canada said Canada Post was on track to lose $1 billion a year by 2020. It estimates that cutting door to door delivery could cut the losses by more  than half, and moving to alternate-day delivery could also save hundreds of millions of dollars.

Even boosting mail costs by 10 per cent a year starting in 2014 would still leave an operating loss of more than $600 million by 2020, the Conference  Board report says.

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