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

The announcement that Canada Post will phase out urban home delivery, raise the price of stamps and cut thousands of jobs is the consequence of changes and challenges that have rocked the mail service in recent years.

Here are a number of Canada Post quick facts, looking at its history, mail volumes, costs, profit and losses.

History

While legislation officially created Canada’s uniform postal system back in 1868, the service made its debut much earlier than that. The first Canadian post office opened in 1753 in Halifax, linking the Atlantic colonies with Britain.

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

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

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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 (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 an average of about $168 per address annually to operate the mail system. Here's a breakdown:

• Door to door (one-third of Canadians) – $283 per address
• Centralized point, such as an apartment lobby lock box (one quarter of Canadians) – $127 per address
• Group/community mailbox/kiosk (one quarter) – $108 per address
• Delivery facility such as a postal box (12 per cent) – $59 per address
• Rural mailbox (five per cent of Canadians) – $179 per address

An April report by the Conference Board of Canada said almost half of all Canadian households send no more than two pieces of mail each month.

In 2006, Canada Post delivered about five billion pieces of domestic letter mail. But by 2012, that volume had dropped to around four billion, with 30 per cent of that decline occurring in 2012 alone. From 2011 to 2012, the service handled 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, dropping 23.6 per cent from 2008 to 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 has grown 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. 

It's a trend that's expected to continue. The April report by the Conference Board of Canada, 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.

In 2012, Canada Post for the first time in its history delivered one million parcels in a single day on two occasions: Dec.10 and Dec. 17.

This year, so far, it has reached that milestone on Nov. 12, Nov. 25, Dec. 2 (Cyber Monday) and Dec. 9.

Costs, revenue, profits and losses

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

Revenue in 2012 fell 1.9 per cent to $1.7 billion from $1.8 billion in 2011. That came after a 25-day labour disruption and a pay equity court settlement, which were estimated to cost the corporation a total of around $350 million.

In the first three quarters of 2013, revenue dropped $20 million compared to the same time frame the previous year.

The Conference Board of Canada's April report said Canada Post was on track to lose $1 billion a year by 2020. It estimated that cutting door-to-door delivery could reduce 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 said.

Controversies

In 2000, Canada Post introduced a vanity stamp program, allowing Canadians to order stamps featuring pictures of themselves or others. But following complaints, it stopped production of a batch of personalized postage stamps that appeared to bear the image of a Tamil Tiger leader. In 2007, when a similar issue arose, Canada Post stood by the program, saying it had no plans to review it.

In 2004, some Chinese-Canadians took issue with a Canada Post stamp aimed at commemorating the year of the monkey because it used a fictional monkey from a Chinese fairy tale. Some compared it to using a Mickey Mouse photo for the year of the rat.

Canada Post also became embroiled in the 2004-05 sponsorship scandal. It was one of the five Crown corporations and agencies found to have played a role in transferring money through questionable means.

In 2008, Canada Post agreed to correct a stamp featuring the historic Pachena Point lighthouse, located near the B.C. West Coast Trail, because the image had been flipped.