Industry group to ask Ottawa to stall upcoming stamp price increases

OTTAWA – An industry group representing companies reliant on mail delivery is asking Canada Post to revisit its decision to raise stamp prices.

The Canadian Consumers for Paper Options (CCPO) says it has lined up several meetings next week with Ottawa officials, including federal Transport Minister Lisa Raitt, to ask for the increase in stamp prices to be put on hold.

The group, which has about 20 members ranging from paper producers Domtar (TSE:UFS) and Cascades (TSX:CAS) to businesses that provide large-volume mail services for items such as bills and flyers, says it was not consulted about the new stamp prices, which go into effect on March 31.

In December, as part of a major cost-cutting initiative, Canada Post announced the cost of stamps, now 63 cents, will rise to 85 cents as of March 31 when purchased in a booklet, or $1 if bought individually. Businesses will see their costs go up anywhere from to 69 to 75 cents per mailing — representing an increase of between 14.75 to 19 per cent.

“This rate increase is not going to solve the problems in the long term,” said Laura Artibello, a business owner and president of CCPO. “It’s just a band-aid solution.”

Artibello said the industry budgeted for a promised increase of three per cent this year, which means that many businesses will have to find savings elsewhere in their budgets or possibly lay off staff to make up for the shortfall.

“Three months notice is not a reasonable time to budget for such a large increase,” she said.

“They are going to be left scrambling. There’s a lot at stake here — more than the price of just one stamp at one store.”

CCPO said it will ask Ottawa to slow down the price increase, or at least have them provide some alternative pricing.

“There’s always a choice. By slowing the rate increase, you can maintain business… and not be losing business,” said Artibello.

A spokesman for Canada Post called the price increases a “difficult but necessary decision” that will help the organization protect itself in the digital age.

“We understand this will represent an increased cost for those organizations who still value the mail,” said spokesman Jon Hamilton in an email.

“With mail declining by one billion pieces per year in 2012 compared to 2006, we needed to take steps, including pricing, to ensure we could provide postal service to all Canadians and not become a drain on taxpayers.”

The federal Crown corporation has said it hopes to realize up to $900 million a year under the plan to replace home delivery with community mail boxes, raising postal rates and cutting thousands of jobs.