09/21/2013 01:57 EDT | Updated 11/20/2013 05:12 EST

Cash-Strapped Canada Post Weighs Future Of Mail Delivery

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Urban Canadians could be saying goodbye to door-to-door mail delivery.

Cutting that service is among the options being seriously considered by Canada Post as it grapples with plummeting volumes of letter mail and financial losses of $104 million in the last quarter.

The minister responsible, Transport Minister Lisa Raitt says it's an idea worth considering.

"They don't need need the government of Canada's policy changes in order to convert to community mailboxes in urban areas.

"That's a huge cost savings and it's those kinds of things that we want to see come to fruition."

As it stands now, only one-third of Canadians get their mail delivered right to their door. Everyone else picks up the post from community, apartment or rural lot line mailboxes. According to a Conference Board of Canada report, Canada Post is on track to lose $1 billion a year.

If the corporation cut door-to-door delivery, the Conference Board's vice-president of public policy David Stewart-Patterson says it could reduce those losses by more than half.

"No single option we looked at will be enough to close the gap. What Canadians need to think about is a range of options and what combination is likely to meet their needs best."

Moving to alternate-day delivery would also save hundreds of millions of dollars and Stewart-Patterson says on the whole, residential customers don't seem to mind that idea.

But it's a different story altogether for small-business owners.

"There's still a very high degree of dependence among small-business owners both to send out their invoices and to get their payments. 'The cheque is in the mail' still works for small business owners in Canada."

Ian Kimmerly is one of those small-business owners who depend on Canada Post. He owns an exclusive stamp dealership in Ottawa.

"We send out many packages, probably at least a dozen large packages all over the world every week and the number of letters could be 40 or 50 in a day."

And that's why Canada Post appears to be leaning towards phasing out the door-to-door service in urban areas.

"When you think about it, people aren't home, they're ordering more and more online, the stuff in the mail is more and more valuable. A community mailbox starts to make a whole lot more sense," says Canada Post spokesman Jon Hamilton.

"I've had both and I know with the community box, if I'm gone for a couple days my mail is all under lock and key."

The move would result a lot of lost jobs, but Hamilton says approximately 30,000 Canada Post employees are due to retire over the next 10 years.

The Canadian Union of Postal Workers is opposed to any cuts to service.

CUPW National President Denis Lemelin says the corporation is ignoring hundreds of millions of dollars in savings that come from new mail sorting and sequencing equipment, not to mention the savings from wage, pension and sick-leave concessions made by employees in the most recent collective agreement.

"Canada Post, they are panicking about what's happening and the only future is cutting and really a smaller postal service. I think they need to sit down and look at all the opportunities before starting cutting."

Lemelin says the corporation should actually be expanding — into banking.

"We know there's more than 2,000 municipalities that don't have banks and there's more than one million people who cannot access bank accounts. Like there's more than 600 reserves in this country and not 10 per cent of them have banking services."

But it appears CUPW's suggestion is falling on deaf ears. In its study, the Conference Board of Canada decided not to delve too deeply into the idea. Canada Post has also shot down the idea.

"When it comes to banking and the infrastructure and the knowledge and at some point having people say you know what, 'I'm going to give you all my money and take good care of it.' That trust level...we know our brand can do a lot of things in terms of trust. That's not one of them," says Hamilton.

Canada Post conducted 47 meetings across the country all summer, presenting different options to stakeholders. It says it will present its findings to the public this fall.

When asked what kind of timeline the corporation has to transform its business model and return to profitability, Minister Raitt says, simply, "Immediately."

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